Games are big business these days, and it’s hard to find someone bigger than Sony. Not only do they own one of the most successful consoles of all time (that would be the PlayStation 4, which managed to sell 5 million units over the 2018 holiday season alone) but they’ve been able to follow that up with a whole host of exciting exclusive content – like Spider-Man, The Last of Us 2, and of course God of War – that has left both Microsoft and Nintendo fans salivating in envy. This should be a golden age for Sony… and yet… after disclosing their quarterly earnings last week, Sony’s stock actually dropped a pretty significant 8.1 percent, the highest ever since 2015.
Why is that?
Well, to put it simply, capitalism is stupid. But to elaborate more, the problem isn’t that Sony and its PlayStation aren't growing: the issue is that the hardware's not growing fast enough. The growth of their gaming division over previous years is not high, and furthermore, investors are anxious about the lack of scheduled software this year that could possibly move more PS4 units. And when you don’t show a constant level of improving growth, combined with an apparent lack of plans when it comes to ways to turn that around, investors get nervous. And when they get nervous, they start selling. And when they start selling, prices drop.
As for what this actually means if you don’t have any literal stock in Sony, well, that largely depends on how they plan to react. They won’t have a presence at this year’s E3, but in practice, they’ll probably announce a bunch of new stuff around that time anyway. In which case, they’ll probably wait to see how people react to that before they make any radical changes to their strategy: especially if one of the planned reveals this year, as many anticipate, is the upcoming PS5.
But we’ll just have to wait and see.