PlayStation posts $765m Bungie loss as Q4 operating income drops 42%

Sony has released its full-year financial report, showing stable sales and a modest uptick in operating income for its Games & Network Services segment (G&NS). Yet the fourth quarter painted a different picture, with operating income dropping 41.6% and PlayStation 5 unit sales declining for the year.

A major factor was a ¥120.1 billion ($765 million) impairment tied to Bungie, following underwhelming performance from its title lineup, including Destiny 2 and Marathon.

Here is a breakdown of the key financial details:

Full-year (12 months ended March 31, 2026)

• Net sales: ¥12.5 trillion ($79.7 billion), up 3.7% year-over-year.
• Operating income: ¥1.4 trillion ($8.9 billion), up 13.4% year-over-year.
• Game & Network Services net sales: ¥4.7 trillion ($29.9 billion), up 0.3% year-over-year.
• Game & Network Services operating income: ¥463.3 billion ($2.9 billion), up 12%.

Q4 (three months ended March 31, 2026)

• Net sales: ¥3.03 trillion ($19.3 billion), up 8.3% year-over-year.
• Operating income: ¥163.5 billion ($1.04 billion), up 24% year-over-year.
• Game & Network Services net sales: ¥1.02 trillion ($6.5 billion), down 2.8% year-over-year.
• Game & Network Services operating income: ¥54.1 billion ($345.1 million), down 41.6% year-over-year.

Revenue for the G&NS segment remained essentially flat for the full year, buoyed by a 13.9% increase in network services sales to ¥763.1 billion ($4.8 billion). Monthly active users climbed to 125 million in the fourth quarter.

Software sales showed strength. Non-first-party titles moved 317.9 million units, up from 303.3 million the prior year. First-party game sales also rose from 28.9 million to 32.1 million units. Total software revenue hit ¥2.6 trillion ($16.5 billion), with digital software and add-ons increasing 5.5% to ¥2.4 trillion ($15.3 billion).

Despite the Bungie impairment, G&NS operating income reached a record high, supported by higher sales and favorable foreign exchange rates. Sony had previously recorded a ¥31.5 billion ($204.2 million) impairment after Destiny 2 underperformed in the second quarter. The latest charge adds ¥88.6 billion ($565 million) in the fourth quarter.

Bungie’s extraction shooter Marathon launched during Q4, and Sony noted that “player reception is strong” with “engagement metrics such as retention also remain at a high level.” The company added: “Going forward, we aim to improve the performance of the game by working to retain highly engaged core users through the introduction of additional content, further improvements in the gameplay experience and expansion of the user base.”

Hardware revenue and unit sales continued their downward trend. Annual hardware revenue fell 12.1% to ¥1.4 trillion, while Q4 revenue dropped 28.4% to ¥209.1 billion ($1.3 billion). PlayStation 5 unit sales declined to 16 million from 18.5 million last year. In the fourth quarter, only 1.5 million units shipped, compared to 2.8 million in the same period last year.

Cumulative PS5 sales now exceed 93 million units. Sony attributes stable profits from software and network services to the growing install base. Regarding potential further price increases, the company recently announced global price hikes for the US, UK, Europe, and Japan in March, followed by South Korea and Southeast Asia in April.

“We plan to base our PS5 hardware sales in FY26 on the volume of memory we can procure at reasonable prices, and we expect hardware profitability to be essentially the same as FY25,” Sony stated. “If circumstances change going forward, we plan to manage the impact on profitability by flexibly adjusting, among other things, unit sales and promotional plans.”

Looking ahead, Sony forecasts a 6% decrease in G&NS segment revenue to ¥4.4 trillion ($28 billion), but a 30% increase in operating income to ¥600 billion ($3.8 billion).