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SONY Reportedly Halts PlayStation VR2 Headset Production
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SONY Corporation (SONY - Free Report) has stopped the production of its PlayStation VR2 headset for the time being amid unsold inventory pile up, per a Bloomberg report.
Citing an IDC report, Bloomberg further noted that shipments have declined every quarter for PS VR2 headset since it was unveiled.
SONY introduced PS VR2 in February 2023 and has produced over 2 million units of the product. There has been no official word on the development from Sony.
Citing an analyst, the report highlighted that hefty price tag ($550) and lack of compatible video games are the factors that are proving an impediment to the product’s sales growth.
SONY is one of the biggest players in the video game industry. However, the weakening industry trends have emerged as a serious concern, prompting the company to trim workforce and cut hardware sales target.
Last month, Sony’s subsidiary Sony Interactive Entertainment (“SIE”) announced to lay off 8% (roughly 900 people) of the PlayStation workforce globally, including its own studios.
In the United States, SIE announced that Insomniac Games, Naughty Dog along with Technology, Creative and Support teams were affected by layoffs. In the United Kingdom, SONY is shutting down its entire London PlayStation Studio, while there will be layoffs at its Guerrilla and Firesprite studio. There will also be reductions at SIE’s various other teams in the country.
SONY also has slashed its PlayStation 5 (PS5) sales target to 21 million units for fiscal 2023 from 25 million units targeted earlier. The company sold 8.2 million units of PS5 in the third quarter of 2023, which fell short of the target to hit its guidance of 25 million units, prompting a downward revision.
Due to lower PS5 sales, management has lowered revenue guidance for the Game & Network Services (G&NS) segment, which is the largest contributor to its sales. Revenues for the segment are now expected to be down 5% from its previous guidance. For fiscal 2023, it now expects sales of ¥12,300 billion compared with the earlier guidance of ¥12,400 billion.
In the last reported quarter, G&NS sales were up 16% year over year to ¥1444.4 billion (representing 38.5% of total revenues). Segmental sales increased on the back of positive impacts of the forex movement and higher sales of non-first-party titles.
Operating income fell to ¥86.1 billion from ¥116.2 billion in the prior-year quarter. The downtick was mainly due to a decrease in sales of first-party titles and an increase in losses from hardware.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased 3.6% in the past 60 days to $3.76. Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 69.1% in the past year.
The Zacks Consensus Estimate for Adobe’s fiscal 2024 EPS has remained unchanged at $17.89 in the past 60 days. The long-term earnings growth rate is 13%. Shares of ADBE have soared 35.7% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is 16.2%. Shares of MSFT have rallied 53% in the past year.
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SONY Reportedly Halts PlayStation VR2 Headset Production
SONY Corporation (SONY - Free Report) has stopped the production of its PlayStation VR2 headset for the time being amid unsold inventory pile up, per a Bloomberg report.
Citing an IDC report, Bloomberg further noted that shipments have declined every quarter for PS VR2 headset since it was unveiled.
SONY introduced PS VR2 in February 2023 and has produced over 2 million units of the product. There has been no official word on the development from Sony.
Citing an analyst, the report highlighted that hefty price tag ($550) and lack of compatible video games are the factors that are proving an impediment to the product’s sales growth.
Sony Corporation Price and Consensus
Sony Corporation price-consensus-chart | Sony Corporation Quote
SONY is one of the biggest players in the video game industry. However, the weakening industry trends have emerged as a serious concern, prompting the company to trim workforce and cut hardware sales target.
Last month, Sony’s subsidiary Sony Interactive Entertainment (“SIE”) announced to lay off 8% (roughly 900 people) of the PlayStation workforce globally, including its own studios.
In the United States, SIE announced that Insomniac Games, Naughty Dog along with Technology, Creative and Support teams were affected by layoffs. In the United Kingdom, SONY is shutting down its entire London PlayStation Studio, while there will be layoffs at its Guerrilla and Firesprite studio. There will also be reductions at SIE’s various other teams in the country.
SONY also has slashed its PlayStation 5 (PS5) sales target to 21 million units for fiscal 2023 from 25 million units targeted earlier. The company sold 8.2 million units of PS5 in the third quarter of 2023, which fell short of the target to hit its guidance of 25 million units, prompting a downward revision.
Due to lower PS5 sales, management has lowered revenue guidance for the Game & Network Services (G&NS) segment, which is the largest contributor to its sales. Revenues for the segment are now expected to be down 5% from its previous guidance. For fiscal 2023, it now expects sales of ¥12,300 billion compared with the earlier guidance of ¥12,400 billion.
In the last reported quarter, G&NS sales were up 16% year over year to ¥1444.4 billion (representing 38.5% of total revenues). Segmental sales increased on the back of positive impacts of the forex movement and higher sales of non-first-party titles.
Operating income fell to ¥86.1 billion from ¥116.2 billion in the prior-year quarter. The downtick was mainly due to a decrease in sales of first-party titles and an increase in losses from hardware.
At present, Sony carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Manhattan Associates (MANH - Free Report) , Adobe (ADBE - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates sports a Zacks Rank #1 (Strong Buy), Adobe and Microsoft carry a Zacks Rank of 2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased 3.6% in the past 60 days to $3.76. Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 69.1% in the past year.
The Zacks Consensus Estimate for Adobe’s fiscal 2024 EPS has remained unchanged at $17.89 in the past 60 days. The long-term earnings growth rate is 13%. Shares of ADBE have soared 35.7% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is 16.2%. Shares of MSFT have rallied 53% in the past year.