Sony Group (NYSE: SONY) reported a 13% year-to-year revenue increase for the third quarter ending 12/31/22. The biggest increase in revenue was the Games and Network Services division which saw revenue increase 53% to ¥1,246,549 million (about $10 billion).
Hardware sales of the PlayStation 5 were the biggest driver of growth for the increasing 119% as unit sales for the PS5 were 7.1 million in the quarter versus 3.9 million in the third quarter ending 12/31/21. However full game software unit sales (digital and physical) were down to 86.5 million from 92.7 million in the quarter ending 12/31/21.
Analysis
After disappointing results from Microsoft’s game division the Sony results are excellent news. In its ninth quarter in the market, the PlayStation 5 has sold 32.1 million units compared with 37.7 for the PlayStation 4. The PS5 sold 7.1 million units in the latest quarter which is not too far behind the 8.4 million units the PS4 did in its comparable quarter on the market (ending 12/31/15). Sony is now expecting to sell 19 million PS 5 units for the fiscal year ending 3/31/23. That would be 6.2 million units in the first 3 months of 2023, far above the 3.5 million units the PS4 did in the comparable time.
Surprisingly physical software did quite well with 216% revenue growth year-over-year. Digital add-on software showed modest growth of 5% while network revenue was only up 19%. With the new PlayStation Plus model subscriptions were 46.4 million at the end of 2022 versus 48 million on 12/31/21.
Forecast for the Game and Network Services division full-year sales ending 3/31/23 remain unchanged at ¥3,630 (about $28 billion). Overall this is an excellent sign that inventory issues are easing. DFC Intelligence will be issuing its full forecast update at the end of the month. As we have mentioned before we are optimistic for 2023 and the Sony results are a great start.
