Sam Nussey

TOKYO Reuters – Shares in Sony After four days of gains, Group Corp lost 8.8% on Thursday in Tokyo early trade. This was after concerns over its gaming business were resurrected amid shortages in components and stiff competition from heavierweight competitors.

Sony dropped almost 13% after Microsoft (NASDAQ) bought Activision Blizzard’s “Call of Duty” software developer. However, the company recently recovered some ground when it made its own deal with Bungie for “Destiny”.

Japanese conglomerate, Mitsubishi Corporation reported Wednesday a record-breaking 3rd quarter profit. It was driven by strong box-office receipts for Spider-Man “No Way Home”, and an unspecified gain. Meanwhile, the gaming unit saw a sharp increase in quarterly profits due to lower operating costs.

Due to component shortages, and logistic snarl-ups, Sony has been struggling to make enough PlayStation 5 (PS5) units in order to satisfy demand. In the third quarter, it sold less units (3.9 million) than in the same time last year.

Due to bottlenecks, Sony had to lower its full-year PS5 sales goal to 11.5million units instead of 14.8 million. As they expand their installation base, console makers take some hit from new hardware sales.

Rumours abound that Sony might be forced by Microsoft to allow games to its Game Pass subscription service. This could potentially reduce margins.

Amir Anvarzadeh (market strategist, Asymmetric Advisors) wrote that “divisonal profitability is coming under great pressure going forward.”

On Wednesday, Sony announced aggressive plans to keep its lead in gaming, stating that it wants to double the first-party gaming revenue and to launch at least 10 new live service titles. These offer constant and up-to date play.

Serkan Toto (founder of Kantan games consultancy) stated that it was a significant change in course for PlayStation.

He stated, “Investors as well as competitors must take the statements Sony made about PlayStation’s future seriously.”