Sony Raises Full-Year Outlook Despite PlayStation Headwinds, Bolstered by Weak Yen
TOKYO – Sony Group Corp. on Thursday lifted its full-year financial forecast, leveraging a weaker yen to counterbalance pressures from its maturing PlayStation 5 console and an industry-wide memory chip crunch. The Japanese conglomerate now anticipates a net profit of 1.13 trillion yen ($7.2 billion) for the fiscal year ending March 2026, up from a previous estimate of 1.05 trillion yen.
The revised outlook, detailed in an earnings statement, also projects a 20.6% rise in operating profit and revenues of 12.3 trillion yen, alongside an improved operating margin of 12.5%. For the third quarter, net profit climbed 11% year-on-year, with operating income of 515 billion yen surpassing analyst expectations.
However, the results reveal a mixed picture. Sales of the PlayStation 5, launched in late 2020, declined 16% in the last quarter, signaling the console's entry into a later stage of its lifecycle. The company had previously offered significant discounts to stimulate demand.
"The PS5 is facing the inevitable slowdown that comes with age," said industry consultant Serkan Toto. "It will definitely get more difficult to offer reduced prices this year than in 2025."
A broader challenge stems from the global memory chip shortage, exacerbated by soaring demand for high-bandwidth memory (HBM) chips used in artificial intelligence servers. This supply crunch is driving up component costs and squeezing margins across electronics, affecting rivals like Nintendo, whose shares fell sharply this week.
Analysts warn the chip shortage could ripple through Sony's broader hardware portfolio, including cameras, TVs, and smartphones, as well as its lucrative image sensor business. In a recent note, Mizuho Securities analyst Yasuo Nakane suggested the supply constraints might even push a potential PlayStation 6 launch into the second quarter of 2028.
Amid these challenges, Sony is pinning hopes on major upcoming game releases, notably Grand Theft Auto VI, now slated for November 2025. "In 2026, GTA VI will do to PS5 what Covid did a few years ago: provide a massive boost, enough to carry the platform to 2028," Toto added, calling it potentially "the biggest game launch of all time."
The company's strategic pivot continues, with growth anchored in its music division—boosted by concert and merchandise revenue—and its imaging technologies. Sony recently moved to spin off its home entertainment TV business into a joint venture with China's TCL, further distancing itself from low-margin consumer electronics.
On the geopolitical front, Sony maintained its estimate that U.S. tariffs on Japanese imports could impact earnings by approximately 50 billion yen this year.
Shares in Sony initially jumped nearly 6% following the forecast hike but pared gains to trade flat by the afternoon in a broadly weaker market.
Reactions & Analysis
David Chen, Tech Portfolio Manager, Horizon Capital: "Sony's guidance upgrade is a classic currency play. The weak yen is providing a temporary earnings cushion, but it doesn't solve the structural issues—the PS5 cycle is winding down, and chip costs are a persistent threat across their hardware lines."
Mika Tanaka, Gaming Industry Analyst, Tokyo: "The focus is now squarely on the software pipeline and the PS5 Pro rumored for later this year. GTA VI will be a system-seller, but Sony needs to navigate the next two years carefully. The potential PS6 delay is a worrying sign of broader supply chain fragility."
Alex Rivera, Editor, 'NextGen Console' Blog: "This is a band-aid on a bullet wound. Sony is relying on a currency fluke and a game that's over a year away while their core product is stagnating. The memory chip issue is being downplayed, but it could cripple their entire hardware roadmap. Where's the innovation?"
Priya Sharma, Consumer Electronics Reporter: "Sony's diversification is its saving grace. The strength in music and imaging sensors shows the wisdom of their long-term shift away from volatile, low-margin TV and phone markets. The PlayStation division might be cooling, but the overall company engine is more balanced."