Sony shares fall most in two years after it says PS5 growth has likely peaked

videogameschronicle.com:

Sony shares recorded their biggest intraday fall since February 2022 after the company said that PS5 sales growth has likely peaked.

As reported by Bloomberg, Sony shares fell as much as 8.4% on Thursday, and closed down 6.5%, following the publication of the company’s latest quarterly financial results.

While Sony had previously hoped to ship a record 25 million PlayStation consoles during its current fiscal year ending in March, it now expects to miss that target by four million units.

It has also forecast “a gradual decline in [PS5] unit sales from next fiscal year onwards”, and said it has no plans to release any new entries in “major” franchises like God of War of Spider-Man during the 12 months ending in March 2025.

“If the platform has already peaked in growth then the outlook could be much grimmer than what even we had in mind for its games business,” Asymmetric Advisors strategist Amir Anvarzadeh said in a research note. “We have long feared that the deep pocketed Microsoft and its subscription service called Game Pass could prove highly disruptive to Sony.”

Tokyo-based industry consultant Dr Serkan Toto told VGC: “After the Q2 sales came out in 2023, it was already crystal clear Sony would never reach 25 million units this fiscal year. Q3 was OK but only possible because of Sony’s heavy promotions and discounts during the holidays.”

Sony recently began offering the first major PS5 Slim discounts since the new model launched last November. In several European countries, the platform holder has temporarily knocked €75 off the regular price of the console.

During a Q&A session following Sony’s financial results briefing, company president and PlayStation chairman Hiroki Totoki said he wants to be “aggressive” when it comes to improving the gaming division’s profit margins, which he said could partly be achieved with a greater focus on bringing first-party games to PC.