PS5 Sales Cut Leads to Huge Loss in Sony Stocks

After lowering its sales forecast for its PlayStation 5 gaming console for the fiscal year, it’s now estimated that Sony lost around $10 billion worth of value from its stock just this week. The Japanese electronics giant now expects to sell 21 million units of the PS5 in the fiscal year ending in March, down from the original estimate of of 25 million units.

Analysts however point to Sony’s declining margins as a greater area of concern – the company’s operating margin in its gaming business came in at just under 6% for the December quarter, considerably less than the 9% margin in the December quarter of 2022. Atul Goyal, equity analyst at Jefferies notes that the low level of operating margin is a key area of concern.

This is despite strong revenue from digital sales and downloads, which should have positively affected Sony’s operating margins. Goyal further described Sony’s current margins as “almost near decade lows.”

It’s been a rocky month for the gaming industry as of late, as other companies have likewise felt similar pains – shares of Sony rival Nintendo recently dropped down to 8.8% on the Tokyo Stock Exchange, before settling on an overall value loss of 5.8%. This drop is attributed to a reported delay of the Switch 2’s launch, which is now expected to drop in 2025.

Going back to Sony’s lowered margins, the company has still not issued a statement regarding this new development.

Source: CNBC