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Sony cuts full-year outlook amid forecasts of declining gaming sales

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Yahoo Finance tech editor Dan Howley discusses Sony's recent earnings report, which offered bleak guidance for the remainder of the year.

Video Transcript

- Sony shares are falling today. A lot of that has to do with gaming. The company trimming its annual profit forecast because of weakness in its PlayStation business. Yahoo Finance's Dan Howley has the details on this. And, Dan, another down day here for Sony, with shares moving to the downside ahead of the close.

DAN HOWLEY: Yeah. Interestingly, they did say that they're going to start building more PlayStation 5s, basically pulling forward what they would have had after the holiday season into the holiday season to make them more available. But that doesn't mean that they'll have more units overall. They're still sticking to the 18 million units for the fiscal year. So that means that there's still going to be supply constraints when it comes to people who actually want to purchase those items.

I think one of the other things that's important to look at is that Microsoft also saw sales declines in hardware as well as in games revenue. That's the same thing we saw at Sony as well. And both companies saw a reduction in overall engagement for gaming. That's something that's really important to talk about just because the more people are engaged, the more likely they are to spend on those platforms. We're still waiting for results from the likes of Nintendo and Take-Two as well as Activision Blizzard. But it's really not looking great for the gaming industry at this moment.

- And, Dan, speaking of gaming, the dominant social media platform of the day, TikTok, looking to get in the game as well. How would that work, though?

DAN HOWLEY: Yeah. They're basically launching these kind of HTML5 games inside the platform that you'll be able to interact with. They're still largely figuring out where they want to go with this. But, look, they have more than a billion monthly active users. That means that they have a huge audience to access these games. And you have to figure that if they're easily available, anybody that can put a game together and then easily monetize it, that would be huge to get it onto TikTok

We don't know how exactly monetization would work, whether it'd be ads or whether you would purchase the game itself, things along those lines. But if they do end up allowing that kind of work to go down on TikTok, you can imagine it turning into a pretty lucrative business.

- Yeah. They are printing money there at ByteDance. Yahoo Finance tech reporter Dan Howley, good stuff.