Sony Group Corp. has announced its intention to conduct an initial public offering (IPO) of its financial arm in October 2025, signalling a significant capital infusion strategy in the wake of revised forecasts for its core gaming division, news agency Bloomberg reported.
Following the release of earnings and adjustments to its fiscal projections through March, Sony unveiled plans to partially sell off its financial group, reversing a $3.7 billion take-private transaction finalised in 2020. Market response was positive, with Sony shares rising by 3.2 per cent in premarket trading in New York upon the announcement.
The decision comes as Sony adjusts its revenue forecast downward, citing lower-than-expected sales of its flagship PlayStation 5 during the December quarter, which fell approximately one million units short of analyst estimates, totalling 8.2 million consoles. Consequently, the company revised its sales projection for the fiscal year to 21 million units, down from the previous estimate of 25 million units.
Naomi Matsuoka, senior vice-president at Sony, remarked, "Looking ahead, PS5 will enter the latter stage of its life cycle. 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 to start falling from the next fiscal year."
In financial terms, Sony now anticipates ¥12.3 trillion ($81.7 billion) in sales for the current fiscal year, down from the previously projected ¥12.4 trillion. Revenue for the quarter ending December stood at ¥3.75 trillion, with an operating profit of ¥463.3 billion, in line with analyst expectations.
Morningstar research director Kazunori Ito commented, "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."
Despite challenges in hardware sales, Sony experienced success in software, notably with the PS5 exclusive release, Marvel’s Spider-Man 2, which sold 2.5 million copies within its first 24 hours. This success, coupled with a record number of users on the PlayStation Network in December, fueled expectations of momentum for the PS5 after initial supply constraints.
Beyond its gaming division, Sony faces strategic re-evaluation in India following the stalling of a proposed merger between its local unit and media entity Zee Entertainment Enterprises Ltd. due to leadership disputes. This setback has prompted Sony to reassess its approach to the Indian market, which boasts significant growth potential.
Chief Operating Officer Hiroki Totoki stated during an earnings call, "Talks with Zee are not advancing, but we think India is a promising market with high growth potential over the long term. If there’s anything that can replace the Zee deal, we’d like to consider it actively."