Media: amid reports of slowing PlayStation 5 sales, Sony's market capitalisation has fallen by $10 billion
Last week Sony announced that "PlayStation 5 is entering the final stage of its life cycle", so the company's analysts expect an orderly decline in sales of the device.
The market instantly reacted to this news with a sharp drop in the value of Sony shares, but as it turned out, this is not the only problem of the Japanese corporation.
Here's What We Know
CNBC asked financial experts to comment on the current state of affairs of Sony and learnt that the market value of Sony has fallen by about $ 10 billion (in shares).
Experts attribute this trend to declining profits from the company's gaming division; in particular, they point out that PS5 sales in the current fiscal year are unlikely to reach the previously announced 25 million units. At the moment Sony expects to sell 21 million consoles by 1 April.
In addition, earlier analysts of the Japanese corporation assumed that the operating margin of the gaming division of Sony, which previously was 12-13%, in the period from January to March this year will increase to 20%, but, unfortunately, this did not happen.
Sony's games are showing excellent sales and the PS Plus service is generating steady revenue, but due to the high cost of software production, the net profit is far below Sony's projections. In addition, the cost of producing games is increasing every year, for example, Marvel's Spider-Man 2 cost $300 million to produce.
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Source: CNBC