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Sony forecasts lower gaming business sales amid memory price surge
<body><p>STORY: Sony forecast lower sales in its gaming business due to a memory chip price surge.</p><p>The tech giant said Friday annual sales in the segment would fall 6% to $28 billion.</p><p>It also blamed lower hardware sales as its PlayStation 5 ages.</p><p>Although the Japanese company said it expects gaming profit to rise 30%.</p><p>That's due to higher first-party software sales and no repeat of the impairment loss it recorded a year earlier.</p><p>Sony has been praised by analysts in recent years for its transformation into an entertainment powerhouse.</p><p>But markets have grown concerned about the impact of AI on its business, while Sony also faces a perceived lack of growth catalysts.</p><p>Both factors have weighed on shares in recent months.</p><p>Investors are also concerned about the impact of a memory-chip price surge.</p><p>As well as disruption to supply chains from the Iran war on margins at electronics manufacturers.</p><p>The firm said it sold 1.5 million PS5 consoles in the fourth quarter, which was a 46% drop on the same period a year earlier.</p><p>Looking ahead, the PS5 is expected to receive a major boost from the launch of the delayed "Grand Theft Auto VI."</p><p>The game is due to release in November.</p><p>Sony said in February it had secured the minimum quantity of memory needed to manage the year-end shopping season. </p><p>Sony also said it sees higher profits at its pictures and chips units but a lower profit at its music business.</p><p>The group reported operating profit for the year ended March rose 13.4% to $9.2 billion - below analyst forecasts. </p><p>Meanwhile, rival Nintendo said it expects to sell 16.5 million units of its Switch 2 console in the financial year ending March 2027.</p><p>It also projects profit to rise 2.7% to $2.36 billion.</p><p>But, like with Sony, investors are concerned about the possible impact of a memory price surge on margins.</p></body>
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