Sony’s PS5 sales plummet amid price rises and a memory crisis

At a glance:

• Sony sold 1.5 million PS5 consoles in Q4, a 46 % year‑over‑year decline.
• The regular PS5 price rose from $499.99 to $649.99 after two price hikes.
• Sony expects annual gaming revenue to fall 6 % amid memory shortages and global economic pressures.

Sales decline and price impact

Sony reported that it shipped only 1.5 million PS5 units in the fourth fiscal quarter, a 46 % drop compared with the same period last year. The decline follows two consecutive price increases that lifted the standard PS5’s retail price from $499.99 to $649.99. Analysts note that the higher price point coincides with a broader slowdown in consumer spending and a shortage of memory chips that has limited console output.

Sony’s chief financial officer said the company expects annual gaming revenue to fall by 6 % in the upcoming fiscal year, a projection that could be further affected by continued memory cost pressures. The firm also warned that hardware profitability may remain flat compared with the previous year, as it plans to rely on the volume of memory it can secure at reasonable prices for FY26. This outlook contrasts with Microsoft’s recent report of a 33 % plunge in Xbox hardware revenue and Nintendo’s decision to raise Switch 2 prices by $50 on September 1st.

Memory constraints and broader market

The memory shortage, which Sony attributes to supply chain disruptions linked to the war in Iran and heightened global demand, has forced the company to limit PS5 production capacity. In March, Sony raised the PS5 price citing “continued pressures in the global economic landscape,” a statement that underscores the difficulty of maintaining affordability amid constrained component availability. Industry observers say the scarcity of DRAM and NAND chips is also affecting other consumer electronics, creating a ripple effect across the broader tech market.

Sony indicated that it has secured “the minimum quantity necessary” of memory to manage the year‑end shopping season, but ongoing supplier negotiations remain critical for meeting customer demand. The company’s strategy for FY26 hinges on procuring enough memory at sustainable price points, a plan that could determine the pace of future hardware sales and profitability. Meanwhile, Microsoft’s Xbox division reported a 5 % decline in content and services revenue, and Nintendo’s forecast anticipates a dip in Switch sales over the next year after its price adjustment.

Bungie acquisition and impairment

In addition to hardware challenges, Sony recorded a $765 million impairment charge against its Bungie studio, the developer behind Destiny 2 and the upcoming Marathon extraction shooter. The impairment reflects the financial strain caused by hundreds of layoffs at Bungie since the acquisition and the delayed development of Marathon following lukewarm alpha test feedback. The acquisition, announced in a $3.6 billion deal shortly after Microsoft’s acquisition of Activision Blizzard, positions Sony to compete more directly in the live‑service gaming space.

Bungie’s recent controversies, including an artist’s allegation of unauthorized use of work in Marathon that was later settled, have further complicated the studio’s trajectory. These setbacks contribute to Sony’s broader forecast of a 6 % decline in gaming revenue, as the company balances investment in first‑party studios with the need to stabilize its hardware business. Investors will watch how memory procurement and studio performance shape the next fiscal year’s profit outlook.