Sony again predicts lower PS5 sales due to chip shortages

In today’s third fiscal quarter earnings, Sony reported that game revenues in the quarter fell from a year ago, and lowered its forecast for PlayStation 5 sales in the coming quarter due to chip shortages.

In the December 31 quarter, Sony reported revenue of $7.09 billion for its games and network services division, down from $7.703 billion a year ago. Operating income was higher, $810 million, compared to $704 million a year ago.

In the quarter, game software sales were steady at $3.77 billion, while hardware sales fell to $2.28 billion from $2.94 billion a year ago when the PS5 first went on sale.

Sony Chief Financial Officer Hiroki Totoki said in an analyst call that the market demand for PS5 is very high, but he said partners supplying components are tight as there are several chip shortages. He said he expects continued shortages of components in the coming year.


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“We can’t say exactly what the demand is for next year,” Totoki said.

For its fourth fiscal quarter ended March 31, Sony cut estimated game sales by 6% due to shortages and an expected decline in sales of PS5 hardware. Sony is gradually building up inventories, but expects shortages in the first half. Totoki said demand appears strong, stable and unaffected by the pandemic.

During the quarter, Sony completed the sale of Game Show Network, a division of Sony Pictures, to Scopely for $1.08 billion. Of that amount, Sony received $508 million in cash and $500 million in preferred stock for Scopely. Sony will see a $617 million profit on its investment.

This week, Sony agreed to buy Destiny maker Bungie for $3.6 billion, a major acquisition in response to Microsoft’s upcoming $68.7 billion acquisition of Activision Blizzard. Totoki said about a third of the purchase price will be deferred to retain employees. He said Sony can learn a lot from Bungie about its skills with live services monetization and its ability to work across multiple platforms. And he said Bungie can use its intellectual property for Sony properties, such as movies and music.

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