Tokyo, (APP – UrduPoint / Pakistan Point News – 14th Feb, 2024) – Japan’s Sony has raised its annual net profit forecast, but has adjusted its PlayStation 5 (PS5) sales target, acknowledging that sales of the flagship console may slow down. The PS5, which is currently in its fourth year on the market, faces stiff competition from US rival Microsoft.
Sony now projects selling around 21 million PS5 units in the current financial year, down from its earlier target of 25 million. Naomi Matsuoka, Sony’s senior vice president, emphasized that the console is entering the latter half of its life cycle and expressed the company’s intention to focus on profitability. She added that the volume sales data of the PS5 is expected to gradually decline from the next fiscal year.
The PS5 faced supply chain challenges when it was first launched in November 2020, causing difficulty in purchasing the console. However, these issues have now been resolved, and Sony highlighted strong software sales and robust user engagement.
Analyst Hideki Yasuda from Toyo Securities commented that the initial target of 25 million sales for the PS5 was ambitious, necessary to encourage third-party game-makers to develop and release new games. He explained that Sony could not set a lower target than the PS4.
Microsoft has sought to enhance its position in the gaming market, evident through its $69 billion acquisition of Activision Blizzard, the creator of the popular Call of Duty games.
Despite the success of Marvel’s Spider-Man 2, which became the fastest-selling PlayStation Studios game within 24 hours of release, Sony needs to be cautious when Microsoft launches Activision games, particularly the Call Of Duty franchises, on its subscription Game Pass. Amir Anvarzadeh from Asymmetric Advisors advised that Sony should watch out for potential competition.
In the quarter ending December, Sony reported significant increases in sales across various segments, including financial, gaming, sensor, music, and pictures. Sales rose by 22 percent to 3.7 trillion yen, resulting in a net profit of 363.9 billion. The dissolution of a subsidiary also led to reduced tax expenses for the company.
Furthermore, Sony is speculated to have secured a deal worth at least $600 million to acquire half of Michael Jackson’s publishing and recorded masters catalog, marking a significant move in the music industry. However, Sony has refrained from commenting on the reported deal.
Sony acknowledged that strikes in Hollywood impacted its movie performance in the previous year, and the effects are expected to continue into the next financial year.
To sum up, while Sony upgraded its net profit forecast, it revised its PS5 sales target, anticipating a slowdown in sales as the console enters the latter half of its life cycle. The company faces competition from Microsoft, which recently acquired Activision Blizzard. Sony’s success with Marvel’s Spider-Man 2 was notable, but it should remain vigilant as Microsoft prepares to launch Activision games on its subscription Game Pass. Despite challenges in the movie segment and the undisclosed deal with Michael Jackson’s catalog, Sony’s overall sales have witnessed significant growth.
