Sony reported flat sales in its Games & Network Services (G&NS) segment for its first quarter, but operating income rose 37%, primarily due to US tariff refunds.
However, the firm noted that increased costs for next-generation platforms and restructuring lowered overall earnings.
Sony also addressed negative feedback about its decision to end physical disc production for new PlayStation games beginning January 2028.
CFO Lin Tao stated that while Sony acknowledges the criticism, it is “going to cautiously move forward” with its plans while also engaging with consumers.
Here’s what you need to know:
The numbers
For the three months ended June 30, 2026:
Overall
- Sales income: ¥2.83 trillion ($17.6 billion), up 8% year-on-year
- Operating income: ¥476.4 billion ($2.9 billion), up 40% year-on-year
Games & Network Services (G&NS)
- Sales income: ¥937.1 billion ($5.8 billion), up 0.6% year-on-year
- Operating income: ¥202 billion ($1.2 billion), up 37% year-on-year
The highlights
Declines in non-first-party game and hardware unit sales were the primary factors behind the G&NS segment’s flat sales in Q1.
First-party game sales fell from 6.9 million to 6 million units, while non-first-party software sales increased slightly from 65.9 million to 66.1 million units.
Total software sales reached ¥526.6 billion ($3.2 billion), with digital software and add-on content accounting for ¥485.2 billion ($3 billion). Physical software generated ¥20.5 billion ($128 million).
Regarding physical production, CFO Lin Tao stated there were “various reasons” for halting physical discs,, the main one “being that digitalisation of contents overall has been progressing.”
“It’s not just for PlayStation, but for all kinds of content, digitalisation is progressing,” she explained. “And so, when we think about the future, we put in a lot of thought and time, and we cautiously considered this, and we came to this conclusion, and we’re going to cautiously move this forward.”
Tao continued: “To this decision we have received various opinions, and people have strong views, and we understand that the community has put forward those views to us. Games are loved by many people, it’s a form of entertainment that’s loved by people, and it’s connected to people’s fond memories in many cases, and so we understand those emotions.
“We want to consider that, and in the future digital ecosystem ‘how do we engage the gamers’ is something that we would like to continue to explore.”
Network services increased 21% year-on-year to ¥172.6 billion ($1 billion). Monthly active users (MAUs) reached 125 million in June, up 2%, marking a record high for the month.
Total playtime declined 4%, but user engagement “continued to be solid” as Q1 “benefited from season updates to major titles and new hit titles.”
Hardware sales totaled ¥222 billion ($1.3 billion), down 10.4% year-on-year. PlayStation 5 unit sales declined from 2.5 million to 1.6 million units.
Sony now forecasts G&NS sales of ¥4.5 trillion ($28.1 billion), up from ¥4.4 trillion ($27.4 billion), and operating income of ¥660 billion ($4.1 billion), up from ¥600 billion ($3.7 billion).
The company also addressed its hardware production outlook given the ongoing memory shortage.
“We have secured the quantity of memory necessary to meet our projected sales volume for FY26, and there is no change to our plan for hardware profitability for FY26 to remain similar to FY25.”