The two leaders in gaming, Sony and Nintendo, have both forecast lower FY22 profits as their supply chain woes continue to drag on the bottom line.

Sony Group said it expects a 6 per cent decline in net profit for the (Japanese) financial year ending March 2023, expecting A$9.08 for the year.

“We may continue to be affected by procurement of parts from Shanghai and the region,” Sony Executive Deputy President and Chief Financial Officer Hiroki Totoki said. The company has factored in a 30 billion yen hit (A$332m) from the city’s lockdown alone.

Sony has just resumed partial production in Shanghai, after a month of lost time.

The company has also been forced to revise its PS5 targets, dropping from 22.6 million units to just 18 million. This is despite overwhelming demand.

“If you ask me whether this number meets the current demand level, it falls slightly short of that,” Totoki said.

Sony’s acquisition of US gaming developer Bungie will also see it record A$486.6 million in expenses regarding this.

 

Nintendo is bracing for even worse times than Sony, with its reliance solely on the gaming industry.

The company sold 20 per cent fewer Switch consoles in the fiscal year ending March than in the previous year, and expects a further 9 per cent slide for the current financial year, dropping to just 21 million.

Nintendo’s total revenue is forecast to drop 6 per cent, to 1.6 trillion yen (A$17.7 billion) with operating profit projected to fall 16 per cent, to 500 billion yen, or A$5.5 billion.