Global gaming boom boosts SONY's PS5 sales by 15%, raises fiscal year profit outlook.

The Japanese technology and entertainment industry leader Sony Group (SONY.US) continues to see growth in sales in its gaming and music businesses, especially with the momentum of the gaming boom in 2025 seeming stronger than in 2024. As a result, Sony's management has raised its profit and total revenue expectations, benefiting from years of large-scale investments in content. While Sony is shifting its focus towards acquiring intellectual property and focusing on entertainment assets and gaming business, its efforts as a high-tech supplier for other hardware manufacturers have stalled. In particular, its smartphone camera sensor business continues to struggle in a long-term downturn market. In contrast, global gamers' demand for the PlayStation 5 (PS5) remains strong, as this hardcore gaming console has entered its fifth year since launch. Sony's ADR stock price has recently been on the rise, but has yet to surpass the historical high set during the 2000 dot-com bubble. However, Sony's stock price on the Japanese stock market has reached new highs since 2025, mainly due to investors betting on the gaming boom continuing to sweep the globe in 2025, with Sony being seen as one of the biggest beneficiaries coming out of the "long bull market" trend. The latest financial report data shows that in the third quarter of the fiscal year 2024 ending in December 2024, Sony sold 9.5 million units of the PS5, an increase of over 15% from the previous year. At the same time, Sony saw a 7% growth in game software sales and nearly a 30% growth in network service sales during that quarter. The number of online subscribers for the PS5 reached 129 million, surpassing any previous generation of Sony PlayStation game consoles. Research director Ito Kazunori from the Wall Street investment firm Morningstar stated, "The PS5 has significantly enriched its game library and expanded its user base. This should ensure larger profits in the next two years." In the fiscal quarter ending in December, the Tokyo-based entertainment and gaming leader reported an unexpected increase in operating profit, contrary to the average Wall Street analyst expectation of a double-digit decline. This prompted Sony to raise its net profit forecast for the fiscal year by 10% to 1.08 trillion yen (about 70 billion USD), slightly higher than the general analyst expectation. Sony also increased its total revenue forecast for the fiscal year 2024 by 4% to 13.2 trillion yen, and raised its operating profit for 2024 by 2% to 1.335 trillion yen, both higher than the general analyst expectation. Sony's significant revenue and profit growth are also attributed to its music business division, as streaming services have boosted sales related to recorded music and music publishing. The company's music business, which includes smartphone games and anime publishing, has been helped by the continued popularity of these streaming services outside of Japan. In addition to announcing strong performance, the Japanese tech giant also announced plans to buy back up to 30 million shares, representing 0.5% of the total shares outstanding, with buyback amount reaching up to 50 billion yen by May 14. In January, Sony announced the promotion of CFO Yuki Kisaito to CEO, who will serve in that position from April onwards, responsible for expanding the company's entertainment and gaming product portfolio. The 60-year-old Kisaito has been in charge of Sony's business expansion beyond gaming consoles, such as PC gaming accessories. In 2024, Sony actively pursued merger and acquisition deals, driving significant growth in its entertainment business. Sony was once a bidder for Paramount Global and expressed interest in acquiring the Japanese content company Kadokawa Corp., but ultimately shelved merger talks with Indian Zee Entertainment due to leadership disagreements. Kisaito's promotion signifies Sony's continuity, as Sony may further withdraw its efforts to expand live game streaming services. One of the company's most famous projects, The Concord Program, failed within two weeks of release and was terminated. The company also restructured the leadership of its gaming division, with Hidetaka Nishino now solely responsible for key gaming and network services business, while Herman Hulst will oversee game studio departments. In the previous quarter, Sony introduced the PlayStation 5 Pro, a high-performance version of its flagship gaming console. Sony stated that this helped achieve better-than-expected sales momentum in the December quarter. The gaming boom continues to sweep the globe, and 2025 may be the "greatest year for gaming" In 2025, Sony will see the release of some blockbuster titles, including Capcom Co.'s "Monster Hunter: Wild Expeditions" and Rockstar Games' highly anticipated "Grand Theft Auto VI," also known as "GTA 6," which will send global gamers into a frenzy. Kisaito stated at the performance meeting, "The upcoming many blockbuster games will help the PS5 continue its current strong growth momentum until the next fiscal year. Industry insiders predict that "GTA 6" may break almost all the records in the video game industry by then - whether in terms of player size or sales scale. Other hot games expected to be released in 2025 include Capcom's "Monster Hunter: Wasteland." "We expect 2025 to be the greatest year in the history of video games, and I believe Sony will benefit greatly from it," said analyst Perelem Smithers, who specializes in researching the gaming industry and provides research reports on the Japanese stock market at a London investment research firm. Smithers added that the compatibility of PlayStation devices with games made by other companies gives Sony a significant advantage over its competitor Nintendo, as Nintendo's game consoles are limited to their own games. Damian Thorne, head of Japanese stock research at Macquarie Capital, said, "The gaming business is becoming a top priority for Sony again, and gaming profits appear to be sustainable. Sony is undervalued, and they will achieve strong profit growth through their gaming business - a very nice combination." 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