Sony trims PlayStation's 2022 sales forecast by 1%

Sony lowered its expectations for its 2022 PlayStation business this morning, trimming its annual sales forecast from $27.4 billion to $27.1 billion.

Why it matters: It's another downward indicator from a top gaming company this week. However, it's small enough that panic about the industry is probably premature.

Details: Sony's lowered projection came alongside negative sales data for its 2022 Q1, ending June 30.

• For the quarter, the PlayStation division netting ¥604 billion ($4.6 billion), down from ¥616 billion ($4.5 billion) in the same quarter for the year before.
• For the quarterly drop, Sony blamed decreases in its own game sales and those of third-party partners.
• But for the annual lowered forecast, it only cited expectations of lower sales from third-parties.

Between the lines: Sony's report comes days after Microsoft reported a 6% drop in its Xbox game sales for the quarter and Capcom reported a year-on-year quarterly decline of 50%.

• Microsoft's drop was significantly impacted by adverse exchange rates, industry analysts at Cowen told investors, and Capcom's hit appeared largely due to a tough comparison to the spring 2021, when it had launched the blockbuster Resident Evil Village.
• Cowen also pointed to soft performance of third-party mega-franchise Call of Duty for the Xbox slump.
• A slew of major game delays is also depressing expectations for the rest of the year. Anticipated holiday releases such as Xbox's Starfield, Ubisoft's Avatar: Frontiers of Pandora, Warner Bros. Suicide Squad and more have slipped to 2023.

Yes, but: Sony blamed one key negative stat on a less temporary factor, the winding down of COVID-19 lockdowns that had triggered a surge in the gaming business over the last two years.

• Sony noted a drop in PlayStation gamers compared to a year ago, from 105 million monthly active users in spring 2021 to 102 million players in spring 2022.

• "We believe the primary reason for this is that the growth of the overall game market has recently decelerated as opportunities have increased for users to go outside due to a reduction in COVID-19 infections in key markets," Sony stated in its financial results.

The big picture: Video game market analysts have predicted small growth at best and possibly a rare decline for the overall industry this year.

• Game delays are a chief factor.
• Another factor: Hardware supply constraints, as new-gen consoles remain in high demand but short supply.
• Beyond that, analysts have predicted a return to solid growth, though not at the rate seen during the pandemic.

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