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Software driving sales in Sony's games division as hardware stutters

Sony has released its financials for the third quarter ended December 31, 2018, and software is bringing home the bacon for the Japanese giant.

Sony has released its financials for the third quarter ended December 31, 2018, and software is bringing home the bacon for the Japanese giant.

Quarterly sales in the company's games and network segment increased by 10 percent year-on-year to 790.6 billion yen ($7.2 billion), while operating income fell by percent to 73.1 billion yen ($668.2 million).

A rise in game software sales was largely responsible for that upswing, and helped offset a decline in PlayStation 4 hardware, with year-on-year sales of the console falling to 8.1 million units in Q3 FY18 from 9 million units in Q3 FY17.

Although PS4 sales are on the wane, Sony said the drop off was in-line with its expectations, and also explained the decrease in operating income was due to the "aggressive promotional activities" it took in an attempt to sell more hardware. 

Overall, lifetime PS4 sales now stand at 91.6 million units worldwide, and Sony intends mitigate the potential "volatility" in hardware profitability by leveraging that sizable install base through network service and add-on content sales. 

Looking ahead, Sony hasn't adjusted its full-year forecast, and still expects to see PlayStation 4 hardware sales reach 17 million units by the end of the fiscal year. 

It's also expecting operating income and sales in its game division to reach 2.35 trillion yen ($21.5 billion) and 310 billion yen ($2.8 billion) respectively when the financial year winds down on March 31, 2019. 

Briefly glancing at the company as a whole, consolidated sales fell by 10 percent to 2.4 trillion yen ($21.3 billion) and profit increased by 45 percent to 429 billion yen ($3.8 billion).

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