[DigitalToday reporter Jinju Hong (홍진주)] Sony's PlayStation 5 (PS5) sales fell sharply, and growth in its game business is expected to slow. The company expects game division revenue to decline in the next fiscal year, citing slower demand for next-generation console replacements and a heavier burden in procuring memory.

On May 11 (local time), online media outlet Gigazine reported that Sony forecast at an earnings briefing on May 8 that fiscal 2026 revenue in its Games & Network Services (G&NS) unit would fall by 265.7 billion yen from a year earlier.

The main driver is slower PS5 hardware sales. Sony said PS5 sales in fiscal 2025 fourth quarter (January to March 2026) totalled 1.5 million units. That was down 1.3 million units from a year earlier. Annual sales also fell 2.5 million units to 16.0 million. The quarter-on-quarter rate of decline was about 46 percent.

Still, weak hardware sales did not directly lead to a broader deterioration in game business results. Foreign exchange effects, higher network services revenue and expanded sales of third-party game software offset part of the decline. Annual revenue in the Games & Network Services unit rose by 87.3 billion yen from a year earlier.

User metrics also held steady. As of March 2026, PlayStation monthly active users (MAU) reached 125 million accounts, up 1 percent from a year earlier and a record high. Total play time in fiscal 2025 fourth quarter also rose 1 percent from a year earlier.

Sony also directly mentioned memory supply conditions in relation to future PS5 sales plans. The company said, "We are establishing sales plans based on the volume of memory procurement that can be secured at reasonable prices," and added, "We expect profitability to be similar to last year."

The industry sees rising AI server demand as also affecting the memory market. It says semiconductor supply is concentrating on AI data centres, increasing cost burdens for makers of consumer electronics.

Price increases are also a variable. Sony announced a PS5 price increase on March 27 and implemented global price adjustments from April 2. The market also raises the possibility that the price hike could add to already slowing hardware demand.

Sony also reflected a decline in profitability at game studio Bungie, which it acquired in 2022. Sony booked an impairment loss of 88.6 billion yen related to Bungie in fiscal 2025 fourth quarter. The company explained, "We revised down our business plan because profits across Bungie's overall title portfolio fell short of expectations."

During the period, Bungie released the PvPvE extraction shooter Marathon. Sony assessed that the game posted a Metacritic score of 82 points and more than 90 percent positive user reviews on Steam, with user retention also favourable. It said overall business profitability fell below expectations regardless of individual title performance, leading to the impairment.

Earlier, Sony also recorded an impairment loss of 31.5 billion yen related to Bungie in fiscal 2025 second quarter, and at the time Destiny 2 was cited as the main reason for weak performance.

Whether results rebound will depend on the success of first-party games, an assessment says. Sony cited Saros, released in April, and Marvel's Wolverine, scheduled for release in September, as key titles in the next fiscal year's lineup and said it "expects profit contributions to exceed last year." Sony's game business is expected to focus on how much it can offset falling hardware sales with network revenue and first-party performance.