Sony lifted its profit and sales forecasts as the Japanese tech giant announced that its sales of the new PlayStation 5 gaming consoles reached 4.5 million units in the past quarter.

As expected, demand for the PlayStation 4 consoles dropped dramatically year-on-year, with only 1.4 million units shipped in the October to December quarter.  

The company reported an operating profit of 359.2 billion yen ($3.4 billion), which represented a robust 20 percent jump from the same period a year ago. Revenues for the quarter came in at 2.7 trillion yen, up 9 percent from the year prior.  

For the next twelve months through March, Sony raised its profit forecast to 940 billion yen, up 34 percent from the 700 billion yen it had previously anticipated. Sales are now expected to hit 8.8 trillion yen in the fiscal full year.

Sales in the company’s gaming division surged 40 percent to 883.2 billion yen, which was helped immensely by the November launch of its PS5 console and game software sales. The unit registered an operating income of 80.2 billion yen, up roughly 50 percent from the previous year.

According to the global research firm Omdia, PS5 console sales are expected to reach nearly eighteen million units by the end of 2021 and sixty-four million by the year 2024.

Meanwhile, Microsoft’s next-generation console sales are expected to hit 12.1 million units this year and 41.8 million by 2024.

Amid the huge popularity seen in the consoles—which retail for about $500—Sony warned in its call that it is struggling to meet demand as it grapples with a shortage of available computer chips. 

“It is difficult for us to increase production of the PS5 amid the shortage of semiconductors and other components,” Sony’s CFO Hiroki Totoki said in a press briefing.

Both Sony and Microsoft are also placing their bets on software and services, which could be the next drivers of revenues. Sony announced that it now boasts more than forty-seven million users of its paid PlayStation Plus subscription service, up from about thirty-nine million a year ago. 

Microsoft said subscribers to its Xbox Game Pass service reached eighteen million in January, which was up from fifteen million in last September.  

Both subscription services—which have become increasingly popular as more people spend time indoors due to the ongoing coronavirus pandemic—offer their users convenient access to numerous free games.  

With Game Pass, Microsoft has successfully integrated its cloud gaming features—the ability to stream video games from an Android smartphone or tablet. Sony, meanwhile, has made available its own separate cloud gaming subscription service called PlayStation Now, which can be found on PlayStation consoles and PCs.

Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.  

Image: Reuters