Sony forecast on Friday that annual sales at its gaming division would fall 6 per cent to 4.42 trillion yen (around $28 billion), as declining PlayStation 5 hardware sales and rising memory chip costs continue to weigh on the business.
The Japanese entertainment and technology group nevertheless expects gaming profits to increase by 30 per cent, supported by stronger sales of first-party software titles and the absence of a major impairment charge recorded a year earlier.
Sony said the forecast also includes ongoing investment in its next-generation gaming platform, as the PlayStation 5 enters its sixth year on the market.
The company sold 1.5 million PS5 consoles during the fourth quarter, representing a 46 per cent drop compared with the same period a year earlier.
Executives said hardware sales remain dependent on Sony’s ability to secure memory chips at ‘reasonable prices’, amid broader concerns across the electronics industry over rising semiconductor costs and supply chain disruptions linked to the conflict involving Iran.
In March, Sony raised PS5 prices again, including a $100 increase in the United States, marking the second price rise in less than a year.
Despite weaker hardware demand, analysts expect Sony’s gaming ecosystem to receive a significant boost from the launch of Grand Theft Auto VI, scheduled for release in November.
Sony additionally announced a share buyback programme worth up to 500 billion yen covering as many as 230 million shares. The announcement helped reverse earlier market losses, with Sony shares trading about 1 per cent higher in Tokyo.
The group reported operating profit of 1.45 trillion yen for the financial year ending in March, up 13.4 per cent from the previous year but below analyst expectations compiled by LSEG, which had forecast 1.56 trillion yen.
Outside gaming, Sony said it expects stronger profits from its film and semiconductor businesses, while forecasting weaker earnings in music.
Although the company continues expanding in areas such as anime, which has gained growing international popularity, Sony has also scaled back some ambitions outside entertainment, abandoning plans to develop electric vehicles together with Honda.
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