Sony 'evaporates' $10 billion in market value

According to VGC , Sony's value has dropped by about $10 billion over the past week after the company revised its PlayStation 5 sales forecast lower than initial expectations.

Sony had previously set a target of shipping a record 25 million PlayStation 5 units in the current fiscal year ending in March. However, in its most recent quarterly earnings report, the company said the actual number would be about 4 million units lower.

Sony 'evaporates' $10 billion in market value after disappointing report

Sony’s stock fell 8.4% following the report, closing down 6.5%, partly due to revised PlayStation 5 sales forecasts, but also due to Sony’s gaming operating profit slipping to 6% (down from 9% in Q4 2022 and 12-13% in previous years).

A new report on CNBC, using data from FactSet, shows that this drop in stock price has reduced Sony's market value by about $10 billion since the sales forecast was revised.

Jeffries analyst Atul Goyal said the lower operating profit was more worrying than the expected drop in sales. Goyal explained that Sony's gaming operating profit had been in the 12-13% range for four years, and the current 6% margin was disappointing, near a decade low.

Goyal also said that Sony's profits should have increased over the period instead of falling, as there were a number of tailwinds that could have pushed the profit figure up to 20%, such as the rise in digital game sales and Sony's PS Plus service, which has a profit margin of around 50%.

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