February 7, 2022: -Sony has faced a challenging start to the year with the Japanese giant, which cuts its sales forecasts for its flagship PlayStation 5 console and faces a more significant challenge from rival Microsoft.<\/p>

Shares of the company have been down about 13% since the beginning of the year, with nearly $25.71 billion of value wiped off the company, according to Refinitiv data.<\/p>

Sony cut its full-year sales target for the PS5 on Wednesday from 14.8 million units to 11.5 million units. Sony sold 3.9 million PS5 consoles in the December quarter, from 4.5 million in the same quarter in 2020.<\/p>

Like many different consumer electronics companies and even automakers, Sony is struggling with a global semiconductor shortage. While demand remains strong, Sony is unable to produce enough consoles.<\/p>

\u201cThere is no demand issue whatsoever, only in the sense that demand is hopelessly above supply,\u201d said Serkan Toto, CEO of Tokyo-based consultancy Kantan Games.<\/p>

Sony’s gaming division posted 813.3 billion Japanese yen revenue, an 8% year-on-year decline. The company cut its sales forecast for the gaming division in its current financial year, which ends in March, by 170 billion yen to 2.73 trillion yen. Although, the downgrade prompted a 6% drop in Sony’s Japan-listed shares on Thursday.<\/p>

“Sony didn’t release any big games in Q3. The company shifted all its firepower to this year. The market once again overreacts; the swings in stock price are way too harsh,” Toto said.<\/p>

Sony is not the only one company that struggles with console production. On Thursday, Nintendo cut its forecast for sales of its Switch console.<\/p>

Thursday’s stock decreases came despite Sony posting an overall increase in revenue and operating profit in the entire quarter, buoyed by the success of its “Spider-Man: No Way Home” movie and its image sensor business.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t