PlayStation announces unchanged Q1 sales and states it is "cautiously moving forward" with stopping the production of physical discs
In the first quarter, Sony reported stable revenue in its Games & Network Services (G&NS) division while experiencing a 37% rise in operating earnings. This increase was largely attributed to a refund on tariffs in the US.
The Japanese giant highlighted that its earnings were impacted by higher expenses related to next-generation platforms and company restructuring.
Sony also addressed concerns from the public about its plan to discontinue the production of physical discs for new PlayStation titles starting January 2028. Despite the criticism, CFO Lin Tao mentioned that the company will proceed cautiously with its plans, while continuing to engage with its audience.
Financial Overview
Covering the quarter ending June 30, 2026:
Overall Performance
- Revenue: ¥2.83 trillion ($17.6 billion), reflecting an 8% growth compared to the previous year
- Operating Profit: ¥476.4 billion ($2.9 billion), showcasing a 40% rise year-on-year
Games & Network Services (G&NS)
- Sales Revenue: ¥937.1 billion ($5.8 billion), a 0.6% increase from the prior year
- Operating Profit: ¥202 billion ($1.2 billion), marking a 37% increase year-over-year
Key Takeaways
The stagnant sales in the G&NS segment for the first quarter were primarily due to declines in non-first-party game and hardware unit sales. Sales of first-party games decreased from 6.9 million to 6 million units, while non-first-party software sales saw a slight uptick, moving from 65.9 million to 66.1 million units.
Total software revenue amounted to ¥526.6 billion ($3.2 billion), with digital software and additional content contributing ¥485.2 billion ($3 billion). Physical software sales accounted for ¥20.5 billion ($128 million).
Discussing the halt of physical disc production, Tao emphasized the shift towards digital content, which is evident across various types of media beyond just PlayStation. "Understanding the future trends, we carefully considered our next steps," she explained. "Despite the feedback received from the community, we aim to move forward while reflecting on these sentiments."
In network services, revenue jumped 21% year-on-year to ¥172.6 billion ($1 billion). June saw monthly active users (MAUs) reaching their highest with 125 million, a 2% increase. Although playtime decreased by 4%, user activity remained robust due to updates in popular games and the introduction of new titles.
Hardware sales were impacted, totaling ¥222 billion ($1.3 billion), a decline of 10.4% compared to the previous year. PlayStation 5 sales fell from 2.5 million units to 1.6 million.
Sony has revised its G&NS sales projections to ¥4.5 trillion ($28.1 billion) from ¥4.4 trillion ($27.4 billion), and increased its operating income forecast to ¥660 billion ($4.1 billion) from ¥600 billion ($3.7 billion).
Addressing the hardware production outlook amidst ongoing memory shortages, Sony assured that they have secured enough memory to meet their sales targets for FY26, anticipating similar hardware profitability as FY25.