Sony targets profit growth despite slowdown in PlayStation 5 sales
Japanese entertainment giant Sony said on Friday it expects annual profit to rise in the fourth quarter as revenues from some of its businesses help offset the negative effects of a contraction in memory prices.
Here’s how Sony’s fourth quarter results compare to LSEG estimates:
- Revenue: 3.036 trillion Japanese yen ($19.4 billion), compared to analysts’ estimates of 2.896 trillion yen.
- Operating profit: 164 billion yen, compared to analysts’ forecasts of 278 billion yen.
While hardware sales fell to 110 billion yen in the fourth quarter, compared to 183 billion yen in the same period last year, revenues were boosted by strong performances in Sony’s image sensor and music businesses.
Total sales of PlayStation 5 fell to 1.5 million units in the fourth quarter, from 2.8 million a year ago.
Sony forecast net profit for the next fiscal year ending March 2027 to rise 13% to 1.16 trillion yen, compared to the 1.03 trillion yen profit it made this year.
The company also said it will buy back up to 500 billion yen of shares next year.
The company’s shares were flat as of market close on May 8, with shares trading down 0.5%.
Memory price increase
Sony is competing with a rival An unprecedented increase in memory prices. Memory is a key component of the PS5, and prices have risen significantly as memory manufacturers divert their stock to massive demand from AI data centers, meaning supply remains limited.
In March, Sony announced that it would increase the prices of its flagship PlayStation 5 consoles for the second time in less than a year due to “pressures in the global economic landscape.”
The company said Friday it expects to limit the impact of memory price increases on its 2026 forecast to about 30 billion yen. It also expects hardware profitability in the next fiscal year to be the same as in the past 12 months.
“In FY25, the impact of memory market conditions became increasingly evident in the smartphone market, particularly in the lower segment, but our mobile sensor sales exceeded our forecasts primarily due to strong shipments to our major customer base,” Sony said in its earnings presentation. he said.
He added that PS5 sales depend on the ability to provide reasonable memory prices for the console.
Sony’s shares have fallen nearly 23% since the beginning of 2026, after posting annual gains of more than 20% in each of the previous three years.
Operating profit in the fourth quarter fell well below expectations as the company suffered losses from its scrapped EV joint venture with Honda and its 2022 acquisition of game developer Bungie.
Sony is forecasting a slight decline in revenue for the next fiscal year, which the company estimates will be 12.3 trillion yen, compared to 12.5 trillion yen this year.
