Sony plans financial unit IPO in ‘25

Sony Group Corp. announced that it would list its financial arm in October 2025, setting the stage for a significant capital infusion as the media giant lowers its expectations for its core gaming division. Bloomberg reported on Wednesday.

Following the release of its revenues report and a revision to its fiscal year-end projections, the company announced its plans for a partial sale. A $3.7 billion take-private agreement reached in 2020 will be reversed by the decision to make Sony’s financial group public.

Sony reduced its revenue forecast after the company’s flagship PlayStation 5 sold 8.2 million units in the December quarter, about a million fewer than anticipated. The Japanese company had previously predicted ¥12.4 trillion in sales for the year, but now projects ¥12.3 trillion ($81.7 billion).

In Q4 2023, it reported an operating profit of ¥463.3 billion and revenue of ¥3.75 trillion, both of which were in line with average analyst estimates.

“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,” Kazunori Ito, Morningstar research director told Bloomberg.

Despite a strong software quarter, hardware sales were disappointing.

Marvel’s Spider-Man 2, which was released in October as a PS5 exclusive, became the fastest-selling debut title from Sony’s in-house studios in just 24 hours with 2.5 million copies sold in its first day.

It raised hopes that the PS5 was gaining traction following years of limited availability, especially in light of Sony’s record-breaking number of PlayStation network users in December.

Regarding Sony’s target of selling over 25 million PS5 units this fiscal year, analysts are still wary. In October, the hardware was updated and made more portable and energy-efficient by the company.

Maintaining the momentum for the $499 machine will be critical for the revenue-generating games division. The PS5, which has been on the market since late 2020, has struggled to connect with Sony’s customer base due to years of supply constraints brought on by pandemic-related shipping bottlenecks and production problems.

Moreover, Ccompetitors Sony is going to face more competition as Nintendo Co. and Microsoft Corp. are anticipated to release new hardware in time for the holidays.

After a planned merger between its India unit and regional media company Zee Entertainment Enterprises Ltd hit a snag over leadership, Sony may need to change its approach in the country. Investors will be watching for signs of Sony’s most recent thinking on the Zee deal, which served as the focal point of the Japanese company’s increased push into a market with 1.4 billion people.

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