We are deep in the heart of earnings season, and one of the largest companies in the video game industry reported their results overnight. Sony's stock is up over 4% in US trading on the release of impressive Q2 2021 numbers. One interesting bit of information disclosed in the report is the news that Sony's Game & Network Services segment has surpassed the company's Electronics Products & Solutions division to become the largest revenue generator in Q2.
Sony's Game & Network Sales (G&NS) segment grew 27% in Q2 2021 from the year ago quarter, driven by strong demand for PlayStation 5 console hardware and solid subscription numbers for PSN and PlayStation Now. Surpassing Electronics Products & Solutions (EP&S) sales in the quarter is an impressive feat that was made even harder to accomplish as Sony rolled reporting of some other revenue segments into EP&S in Q1 2021. G&NS was also the most profitable revenue segment at Sony during the quarter, reporting operating income of 82.7 billion yen on revenues of 645.4 billion yen.
Sony PlayStation 5 console sales highlighted Q2 2021 for the company, with over 13 million units sold since its launch last year. Sony (SONY) shares have been reacting positively to today's news with the stock currently up over 4% on the day. It appears that these results would have been even better if PS5 supply wasn't hampered by the ongoing global chip shortage.
Times truly have changed for Sony. The company once dominated TVs and portable music players as the leading consumer electronics brand of the 90s, and has apparently successfully transitioned with new leadership and a 21st century vision. PS5 has a long runway ahead of it, so this new king of revenue segments is probably here to stay for the foreseeable future.
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.