Finance
Sony lifts earnings targets after strong quarter, but PlayStation 5 sales slide
Published by Global Banking & Finance Review®
Posted on February 5, 2026
2 min readLast updated: February 5, 2026
Quick Summary
Sony's third-quarter profit rose 22%, beating estimates. The company raised its full-year forecast by 8%, driven by its music business, amid market challenges like rising chip prices.
Sony Raises Earnings Forecast Despite Decline in PlayStation 5 Sales
Sony's Financial Performance and Challenges
By Sam Nussey
Operating Profit Growth
TOKYO, Feb 5 (Reuters) - Japan's Sony on Thursday reported a 22% rise in third-quarter operating profit that trounced forecasts and lifted its full-year outlook, although sales of its PlayStation 5 console slid.
PlayStation 5 Sales Decline
Sony's shares jumped 4% on the results, also helped by its announcement of an expansion in its share buyback scheme.
Impact of AI on Gaming Industry
Operating profit climbed to 515 billion yen ($3.3 billion) for October-December, comfortably above the 469 billion yen average of 10 analyst estimates compiled by LSEG.
It hiked its full year operating income forecast by 8% to 1.54 trillion yen, citing the performance of its music business.
The Japanese conglomerate has, over the years, made a successful pivot from household electronics to entertainment, but has seen its share price slide in recent months as investors question what its future growth drivers will be.
In one concern, Sony sold 8 million units of its PlayStation 5 console during the October-December quarter, which includes the key year-end shopping season - a 16% decline from the same period a year earlier.
That said, profit at the gaming unit grew 19% to 140.8 billion yen, with higher sales of software offsetting larger losses from hardware.
Hardware makers also are grappling with surging memory chip prices amid a boom in AI investment. Shares of gaming peer Nintendo slumped on Wednesday amid concern over the impact of rising chip prices on margins.
The adoption of artificial intelligence in the videogames industry has also created uncertainty, with gaming stocks falling in recent days on the introduction of an AI-powered game-making tool by Alphabet's Google.
Sony's console business is expected to receive a boost from the launch of Take-Two Interactive's delayed "Grand Theft Auto VI" which is scheduled for release in November.
The conglomerate said it would expand a share buyback that runs to May to up to 150 billion yen from 100 billion yen previously.
($1 = 156.8400 yen)
(Reporting by Sam Nussey; Editing by Christopher Cushing and Edwina Gibbs)
Key Takeaways
- •Sony's third-quarter profit rose by 22%, surpassing estimates.
- •The company increased its full-year profit forecast by 8%.
- •Sony's music business significantly contributed to profit growth.
- •Rising memory chip prices pose challenges for hardware makers.
- •AI adoption in gaming creates market uncertainty.
Frequently Asked Questions about Sony lifts earnings targets after strong quarter, but PlayStation 5 sales slide
1What is operating profit?
Operating profit is the income generated from normal business operations, excluding any income derived from non-operational sources. It reflects the company's efficiency in managing its core business activities.
2What are market trends?
Market trends refer to the general direction in which a market is moving, based on various factors such as consumer behavior, economic conditions, and technological advancements.
