Sony Group Corp said it will list its financial arm in October 2025, prepping a major capital infusion after the media conglomerate cut the forecast for its core gaming division.

The company revealed plans for the partial sale after reporting earnings and revising its forecasts for the fiscal year through March. The move to take Sony’s financial group public will reverse a US$3.7 billion take-private deal concluded in 2020.

Sony trimmed its revenue forecast after sales of its flagship PlayStation 5 (PS5) came in roughly a million units lower than projected in the December quarter, at 8.2 million consoles. The company also said it now expects to sell 21 million units for the fiscal year, down from the previous forecast for 25 million units.

“Looking ahead, PS5 will enter the latter stage of its life cycle,” said Naomi Matsuoka, Sony's senior vice-president. “As such, we will put more emphasis on the balance between profitability and sales. For this reason, we expect the annual sales pace of PS5 hardware will start falling from the next fiscal year.”

The Japanese firm now expects ¥12.3 trillion (US$81.7 billion or RM391.23 billion) in sales for the year, down from ¥12.4 trillion previously. It reported revenue of ¥3.75 trillion and operating profit of ¥463.3 billion in the quarter ended December, 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,” said Morningstar research director Kazunori Ito.

The disappointing hardware sales came despite a strong quarter for software. Released in October as a PS5 exclusive, Marvel’s Spider-Man 2 sold 2.5 million copies in its first 24 hours, making it the fastest-selling debut from Sony’s in-house studios. It lifted expectations, along with Sony’s record number of users on the PlayStation network in December, that the PS5 was gaining momentum after years of limited supply.

Analysts remain cautious about Sony’s goal of selling more than 25 million PS5 units this fiscal year. The company released an updated edition of the hardware in October, making it more compact and power-efficient.

Key for the revenue-driving games division will be sustaining momentum for the US$499 machine. On the market since late 2020, the PS5 has had a difficult time reaching Sony’s audience as production issues and pandemic-related shipping bottlenecks limited its supply for years.

Rivals Nintendo Co and Microsoft Corp are expected to release new hardware in time for the holiday season, raising the level of competition that Sony will face.

Sony may need to reshape its strategy in India, after a planned merger between its India unit and local media outfit Zee Entertainment Enterprises Ltd reached an impasse due to disagreement over leadership. The Zee deal was the centrepiece to the Japanese firm’s increased push into a market of 1.4 billion people, and investors will look for indications of Sony’s latest thinking on the matter.

  - Bloomberg