Sony cuts PS5 full-year sales expectations
Sony Group (SONY) slashed its full-year sales guidance for its popular PlayStation 5 console, cutting its estimate to 21 million units from 25 million units sold. The company notes the gaming unit is now entering the "latter" half of the console cycle. It comes in a third quarter earnings report in which the conglomerate posted record revenue in the key holiday quarter.
Yahoo Finance's Rachelle Akuffo and Brad Smith discuss the results.
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Editor's note: This article was written by Stephanie Mikulich
Video Transcript
RACHELLE AKUFFO: Sony pulling back on expectations for gaming, saying it now expects full-year sales of only 21 million PlayStation 5 units, down from its previous forecast of 25 million units. The company also slashing its sales outlook for its gaming division as a whole. Now this is interesting because I know we've been talking a lot about these different gaming tie-ups.
BRAD SMITH: Yeah.
RACHELLE AKUFFO: And you would think Sony was well positioned. So I'm not sure if it was more of a pricing issue on the consumer side or that a lot of people weren't ready for that sort of upgrade, especially given how much they've already paid for the previous iteration.
BRAD SMITH: Yeah, this was a really difficult cycle, it sounded like. The cost reduction within the cycle, difficult to come by, they mentioned. And they just frankly said on the call, "For gaming this year, profit margin, especially the operating margin, was not really a wonderful situation." And so, well, partly because they're currently in a transition where the PS5, that PlayStation 5, as a hardware unit, is expanding as a process.
But what they need to manage is the PS4 and the previous generals. So, unlike previous generations they talk about, if you look at the console cycle, cost reduction within the cycle, very difficult to come by. So, it really is where that's impacting margins where they're trying to get through some of that inventory as well, it seems like, during this most-recent quarter.
RACHELLE AKUFFO: It's true. And we saw the Senior Vice President Naomi Matsuoka saying, "Looking ahead, PS5 will enter the latter stage of its life cycle." So we'll see if that timing aligns perhaps for the next quarter or two to see if that ends up panning out.
BRAD SMITH: Yeah.
