Sony aims for double-digit profit growth despite PlayStation 5 sales slowdown

Japanese entertainment leader Sony projected its yearly earnings to climb, as revenue from key divisions in the last quarter helped counteract challenges from declining memory prices.

Though sales from hardware dropped to JPY 110 billion this quarter, down from JPY 183 billion the previous year, revenues strengthened thanks to robust results in Sony’s imaging sensor and music segments.

The PlayStation 5 saw sales decrease to 1.5 million units during this quarter, a decline from 2.8 million units last year.

Sony anticipates a 13% rise in net profits for the next fiscal year, culminating in March 2027, with projected profits of JPY 1.16 trillion, compared with 1.03 trillion yen earned this year.

The company also announced plans to repurchase up to 500 billion yen worth of shares over the ensuing year.

As of May 8, the company’s stock remained stable, closing with a 0.5% dip.

Sony is managing an unprecedented climb in memory prices. Memory is crucial to the PS5, and costs have surged dramatically as manufacturers shift their supplies to meet immense demand from AI data centers, maintaining a limited supply.

This past March, Sony declared its intention to increase pricing for its top-of-the-line PlayStation 5 consoles again within a year due to "global economic pressures."

On Friday, Sony forecasted that the economic impact of memory price increases on its 2026 expectancies would be around 30 billion yen. 

It also anticipates hardware profitability next fiscal year to remain consistent with the previous year.

"In the fourth quarter of FY25, memory market conditions notably influenced the smartphone sector, especially in the budget segment, yet our mobile sensor sales exceeded predictions, mainly due to substantial shipments to a major client," stated Sony in its earnings report.

The company also mentioned that PS5 sales are contingent on maintaining affordable memory costs for the consoles.

Sony’s shares have fallen roughly 23% since the onset of 2026, following yearly growth of over 20% in each of the preceding three years.

The fourth quarter’s operating profit notably missed expectations, driven by setbacks from Sony’s terminated EV collaboration with Honda and its 2022 acquisition of game developer Bungie leading to financial write-downs.

Sony predicts a slight revenue decrease for the upcoming fiscal year, forecasting JPY 12.3 trillion relative to the JPY 12.5 trillion achieved this year.