Things are looking up for Sony when it comes to video game sales. The company recently raised its fiscal year operating profit projections by an impressive $13%. Now, Sony is projecting a profit outlook of 700 billion yen, which equates to $6.7 billion.
It credits the video game unit with this increase, citing a surge in demand during the COVID-19 pandemic, when everyone was looking for home-based entertainment more than ever before.
Original projections out of Sony sat at 620 billion yen. The average analyst expectations hit 658.9 billion yen, which the company has also exceeded. This all comes just a few weeks before the company releases the Sony PlayStation 5, one of the most anticipated gaming consoles in recent memory.
Sony believes that it will sell more than 7.6 million PlayStation 5 consoles between release and the end of the fiscal year, which goes to the end of March 2021. That would be quite the feat, as this projection would handily outsell the PlayStation 4 in its first fiscal year, according to Sony Chief Financial Officer Hiroki Totoki.
Global entertainment consumption has definitely shifted in 2020, thanks in no small part to the COVID-19 pandemic. This has been good for Sony’s bottom line, especially at a time when US/China trade tensions have caused the company’s smartphone image sensor industry to take a serious hit.
Sony’s aim right now is to attempt to overtake Nintendo’s massive success during the 2020 holiday season in order to drive growth for its new console. The Nintendo Switch recently set records as the highest selling console in the United States for a whopping 22 consecutive months.
“Sony will spend a lot of money to deliver many units of the PlayStation 5 to the US, probably by air,” Ace Research Institute analyst Hideki Yasuda said. “The hardware would be sold at a slight loss as well.”
It is believed at this time that hardware sales for the PlayStation 5 will account for what Sony is calling “a small minus” to its bottom line in the first few months. Sony’s CFO confirmed this, fueling expectations that the system will be a loss leader, at least in the beginning.
Jim Ryan, Sony Interactive’s Entertainment CEO, commented on the PlayStation 5’s early sales surge, noting that the company sold as many PlayStation 5 consoles in the first 12 hours of presale as they did in the first 12 weeks of the PlayStation 4’s release.
The PlayStation 5 releases in the United States, Canada, Mexico, Japan, South Korea, Australia, and New Zealand on November 12. It releases for the rest of the world on November 19.