According to CNBC, the value of Sony has plummeted by over $10 billion in the past week, as stock prices dropped from around $96 per share to $87 per share. This decline is attributed to Sony’s recent announcement during their quarterly earnings report, where they lowered their sales target for PS5 from 25 million units per year to 21 million units. Additionally, the gaming business’ profit margin in the latest quarter fell by 6%, down from 9% compared to the same quarter last year, when it was at 12-13%.
Analyst Atul Goyal from Jefferies pointed out that these figures are disappointing for investors. Despite the significant increase in revenue from digital game sales and services like PS Plus, the profit margin has taken a hit. This suggests that Sony’s profitability has decreased, possibly indicating that the cost of game development has increased (leaked information from Sony reveals that the cost of developing the game Spider-Man 2 amounted to a hefty $315 million).
As a result of these developments, a number of investors have sold off their Sony shares, leading to a drop in stock prices.
Source: CNBC
Stock prices from Yahoo Finance
TLDR: Sony’s value has decreased by over $10 billion following a reduction in PS5 sales targets and a decline in the gaming business’ profit margin. Investors are concerned about Sony’s decreased profitability and high game development costs.
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