Sony has laid out an ambitious target to sell more than 100m units of its new PlayStation 5 console as it bets that a gaming boom due to the Covid-19 pandemic will continue to fuel the $145bn industry.
The Japanese entertainment group announced the sales goal on Wednesday as it raised its annual profit guidance by 13 per cent, cushioning a heavy blow to sales of its smartphone camera sensors as a result of US sanctions on Huawei, the Chinese telecoms equipment group.
Hiroki Totoki, Sony’s chief financial officer, said the company aimed to sell more than 7.6m units of the console in the first year after its launch in mid-November. Its long-term objective is to surpass the 100m milestone achieved by the PS4 six years after it debuted in 2013.
“We will be launching the PS5 in the best ever condition,” Mr Totoki said, highlighting a strong line-up of launch games despite some delays in development caused by the pandemic.
Analysts say hitting the target will depend on the PS5’s success in the US, where it will face a head-to-head battle with Microsoft’s new Xbox, which will also be launched next month.
Sony will offer two new PS5 consoles including a cheaper option, without a disc drive, at $399 — $100 more than the equivalent Xbox Series S. A PS5 with a disc drive will be priced at $499, matching the Xbox Series X. Both will go on sale on November 12 in Sony’s core markets including the US and Japan, and on November 19 in the rest of the world.
The success of the PlayStation has become even more critical for Sony as it wrestles with a sharp decline in its image sensor business, which has been hit hard by the sanctions against Huawei, its second-biggest customer after Apple.
For the year ending in March 2021, Sony said it expected an operating profit of ¥700bn ($6.7bn), compared with the ¥620bn it projected in August, after boosting its gaming profit outlook by 25 per cent. That was higher than analysts’ forecasts for a ¥662bn profit, according to S&P Global Market Intelligence.
For the July to September quarter, Sony’s operating profit increased 14 per cent from a year earlier to a record ¥317.8bn.
The more bullish outlook followed a rise in games sales and in subscriptions to its PlayStation Plus service, as people have spent more time at home due to travel and social restrictions caused by the pandemic.
Still, Hideki Yasuda, an analyst at Ace Research Institute, warned that the pandemic-fuelled gaming boom may be slowing, citing a 15 per cent decline in quarter-on-quarter operating profit for Sony’s gaming division.
In other divisions, cinema closures reduced second-quarter revenue for Sony’s film business by 26 per cent. The company was also forced to cut its full-year profit guidance for its image sensor division by 38 per cent after halting sales to Huawei from September 15.
Sony also booked an inventory writedown of ¥17.5bn as a result of the Huawei sales halt, which analysts estimate accounted for about 20 per cent of its image sensor operating profits and revenue.
While the company has tried to offset lost sales to Huawei by finding other clients, Mr Totoki said a full recovery in its image sensor business would probably not arrive until the 2022-23 fiscal year.
