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The PlayStation 4, a five-year-old company, is delivering more energy and earnings growth to Sony's business, compared to Nintendo's newest switch.
Quarterly figures from the two video game industry competitors showed that Sony had its best console cycle, while Nintendo struggled to increase sales of its machine, whether at home or on the road. Sony has further improved its operating profit forecast, as shown last week's results, while Nintendo missed its estimates and kept its outlook intact.
Gaming machines tend to follow a predictable cycle of faster growth, lower prices and retirements. But Sony breaks this pattern with a solid collection of game titles for the holiday shopping season, including the famous hit Spider-Man, which prepares the PlayStation 4 for its best year ever. Without a new crop of new games and a single planned holiday, Nintendo has maintained its forecast for 20 million switch shipments for the fiscal year.
"The PlayStation is doing very well, Spider Man sold like crazy in the second quarter, "said Kazunori Ito, an analyst at Morningstar Investment Services in Tokyo. "On the surface, it's hard to say it was a good quarter for Nintendo."
Investors have noted that Sony's shares had risen 15% this year before the results, while those of Nintendo were down.
To summarize, Sony extracts a page from Nintendo's game book by creating games created by his own studio. these first-game titles are also more profitable. PS4 exclusivity God of War sold 3.1 million copies in its first three days of April, while Spider Man overcome with a record 3.3 million copies over an equal period of time. Nintendo relies on one title, the latest version of Super Smash Bros. for Switch, to continue its momentum in the last three months of the year.
"Sony is using proprietary titles very well – coupled with subscription services like PS Plus, which boost PS4 sales and extend its life cycle," said Ito. "It will be painful for Nintendo without more games in the first game mode."
Sony's December also seems strong in third-party games. Analysts predict record sales of Red Dead Redemption II after it became the best-reviewed game of the year, according to Metacritic. call of Duty Black Ops set a new PlayStation record for first-day digital sales, and other upcoming headlines this quarter include Battlefield V, Fallout 76 and Just Cause 4.
Sony's operating profit was 239 billion yen ($ 2.1 billion) for the September quarter, an estimate of over 205 billion yen on average by analysts. More than a third of this figure comes from the PlayStation division, where profits grew 65% over the previous year, reaching 91 billion yen. Total income was 2.2 billion yen.
For the full fiscal year, the Tokyo-based company raised its forecast operating profit to 870 billion yen from the previous forecast of 670 billion yen. Although the PlayStation division is doing well, it should also be noted that the music sector accounted for about half of this increase, thanks to the acquisition of EMI Music Publishing for $ 2.3 billion this year. The agreement added a catalog of 2.1 million songs by Beyonce, Carole King and other artists. Sony's outlook for total sales edged up to 8.7 trillion yen.
Nintendo's quarterly operating profit of 31 billion yen, and its 221 billion yen turnover, both missed market forecasts. This raises the question of whether Nintendo can achieve its Switch sales goal. The Kyoto-based company has maintained its forecast for the year.
"It was a quiet neighborhood without a lot of big Nintendo releases," said Hideki Yasuda, Senior Analyst at Ace Research Institute. "Achieving their Switch target really depends on the holiday district, especially the new Super Smash Bros. Thu."
The battle between Sony and Nintendo is also a test for new corporate executives, both of whom took office a few months ago. Kenichiro Yoshida of Sony, the former chief financial officer who was promoted to chief executive officer in April, set the bar low to scare investors. Nintendo's Shuntaro Furukawa represented more of a generational change when he became president in April, promising to "grow society to the fullest."
"It is very important to continue publishing new software," Furukawa told reporters at a press conference after the publication of the results last week. – Bloomberg
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