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Sony's Q4 Revenue Drops 24% Amid Tariff Concerns, PlayStation 5 Sales Decline

Word on the StreetWednesday, May 14, 2025 4:01 am ET

1min read

Sony Corporation reported its fourth-quarter and full-year financial results for the fiscal year ending March 31, 2025. The company's fourth-quarter revenue declined by 24% year-over-year to 2.6 trillion yen, missing market expectations of 3.03 trillion yen. However, the operating profit for the quarter was 203.6 billion yen, an 11% decrease year-over-year but better than anticipated. Net income attributable to shareholders was 197.7 billion yen, a 5% increase year-over-year, surpassing market expectations of 145 billion yen.

By business segment, Sony's Game & Network Services (G&NS) division generated 1.05 trillion yen in revenue. The Music division brought in 470.7 billion yen, the Pictures division reported 414.6 billion yen, the Electronics, Technology & Services (ET&S) division contributed 484.1 billion yen, and the Imaging & Sensing Solutions (I&SS) division generated 409 billion yen in revenue.

For the full fiscal year, Sony's revenue was 12.96 trillion yen, roughly flat compared to the previous year. Operating profit increased by 16% to 1.41 trillion yen, and net income attributable to shareholders rose by 18% to 1.14 trillion yen. Notably, Sony sold 18.5 million PlayStation 5 consoles during the fiscal year, down from 20.8 million units in the previous year.

Sony's new CEO, Hiroki Totoki, faces the challenge of navigating the company through the impact of U.S. tariff policies, which could affect the company's image sensors and film divisions. The PlayStation 5, a significant revenue driver for Sony, is primarily manufactured in China and has a substantial market presence in the U.S. The recent price increase for the console in Europe, Australia, and New Zealand has raised concerns about potential price hikes in the U.S. if tariffs remain in place. Such price increases could slow the momentum of the five-year-old console, especially as it competes with Nintendo's upcoming Switch 2, scheduled for release in June.

The delay in the release of the highly anticipated "GTA 6" game has also impacted PlayStation 5 sales. Industry analysts have noted that the game was expected to drive many consumers to upgrade from the PlayStation 4 to the PlayStation 5.

Looking ahead to the 2025 fiscal year, Sony expects operating profit to reach 1.28 trillion yen, with tariffs anticipated to reduce this figure by 100 billion yen. Even excluding the impact of tariffs, Sony's operating profit forecast for the 2025 fiscal year falls short of market expectations of 1.5 trillion yen.

In addition to its financial performance, Sony announced a stock buyback program worth 250 billion yen and outlined a plan to spin off its financial division. The company intends to list the financial division on September 29 and will begin accounting for it as a discontinued operation starting from the current fiscal quarter.

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