Sony reduces PlayStation 5 sales expectations to 21 million units

This reduction in expectations comes after Sony recorded record quarterly revenues in the most important December quarter, which includes the holiday season. Sony sold 8.2 million units of its flagship PlayStation 5 console in its fiscal third quarter, which runs from October to December. Sony has sold 16.4 million PS5 units so far in its fiscal year.

Sony also cut its gaming division's fiscal year sales forecast by 210 billion yen to 4.15 trillion yen, saying it expects a decline in hardware sales.

The challenge for the company now is to try to maintain the momentum of the PS5, which was released more than three years ago. In October, Sony made available an updated version of the console with better specifications.

Rival Nintendo faces a similar problem, having managed to maintain interest in its nearly seven-year-old Switch console thanks to new game releases and movies tied to its popular characters, like Super Mario.

Sales in Sony's gaming segment rose 16% year-on-year to 1.4 trillion yen in the December quarter, the company said on Wednesday. However, operating profits fell by 26% in the division, due to increased losses from hardware due to promotions in the period as well as lower sales of first-party games.

Sony also lowered its sales forecast for the entire company to 12.3 trillion yen from 12.4 trillion yen for the fiscal year.

Sony beat analysts' expectations by a wide margin in its fiscal third quarter when it announced results on Wednesday.

Here's what Sony did in the December quarter versus LSEG consensus estimates:

• Revenue: 3.75 trillion yen ($24.9 billion) vs. 3.58 trillion yen expected
• Operating profit: 463.3 billion yen versus 428.4 billion yen expected

Sony said it will partially spin off its financial services business via a public listing. The company plans to distribute just over 80% of its shares in Sony Financial Group through in-kind dividends as a result of the split, in a listing scheduled to take place in October 2025.

Sony's financial services unit saw revenue in the December quarter rise more than 1,100% to 311.7 billion yen. The company said this was due to higher sales in its insurance business.

Sony also announced a 21% jump in sales of its image sensor business, which it sells to companies like Apple for smartphones.

Meanwhile, Sony in January canceled a planned merger with India's Zee Entertainment. The deal, which was negotiated more than two years ago, was seen as a way for Sony to enter the lucrative Indian entertainment market.

Hiroki Totoki, Sony's chief financial officer, said on Wednesday that India has “significant growth potential.” He added that Sony would “look for different opportunities” in India and would consider plans to “replace” its failed merger with Zee Entertainment.

Correction: This story has been updated to reflect Sony's record revenue for the quarter.