Sony Plans to List Financial Arm in 2025

Sony Group Corp. announced its intention to list its financial arm in October 2025, unveiling a major capital infusion strategy following a downward revision of its core gaming division’s forecast.

The decision to partially sell Sony’s financial group comes in the wake of the company’s earnings report and revised forecasts for the fiscal year ending March. This move marks a significant shift from the $3.7 billion take-private deal executed in 2020.

Sony adjusted its revenue forecast downward after PlayStation 5 (PS5) sales fell approximately one million units short of projections in the December quarter, totalling 8.2 million consoles. The company now anticipates selling 21 million units for the fiscal year, a reduction from the previous estimate of 25 million units.

“Looking ahead, PS5 will enter the latter stage of its life cycle,” stated Naomi Matsuoka, senior vice president. “As such, we will put more emphasis on the balance between profitability and sales. For this reason, we expect the annual sales pace of PS5 hardware will start falling from the next fiscal year.”

The Japanese conglomerate now forecasts ¥12.3 trillion ($81.7 billion) in sales for the year, down from the previous projection of ¥12.4 trillion. Its reported revenue of ¥3.75 trillion and operating profit of ¥463.3 billion in the quarter ended December aligned with average analyst estimates.

“The result showed Sony spent a lot on promotions to sell the PS5, as the unit’s profitability deteriorated, but the number of units it shipped during the quarter was much weaker than expected,” commented Morningstar research director Kazunori Ito.

Despite lacklustre hardware sales, software performance remained robust. Marvel’s Spider-Man 2, released in October as a PS5 exclusive, sold 2.5 million copies within its first 24 hours, marking the fastest-selling debut from Sony’s in-house studios. Analysts, however, remain cautious about Sony’s ambitious goal of selling over 25 million PS5 units this fiscal year.

The challenge for Sony’s revenue-driving games division lies in sustaining momentum for the $499 PS5 amid increased competition. Production issues and pandemic-related shipping bottlenecks have hindered the console’s supply since its launch in late 2020.

Furthermore, Sony faces potential strategic shifts in India following an impasse in the planned merger between its India unit and local media outfit Zee Entertainment Enterprises Ltd. The Zee deal was a cornerstone of Sony’s expanded foray into the Indian market, and investors are keen to glean insights into Sony’s updated strategy in this crucial market.

As rivals Nintendo Co. and Microsoft Corp. prepare to launch new hardware for the holiday season, Sony must navigate heightened competition while charting a course for growth in its gaming division and beyond.

Pan Finance is a print journal and news website providing worldwide intelligence on finance, economics and global commerce. Known for our in-depth analysis and opinion pieces from esteemed academics and celebrated professionals; our readership consists of senior decision makers from across the globe.

Contact us