By Sam Nussey
TOKYO (Reuters) - Shares in Sony (NYSE:SONY) Group Corp slid as much as 8.8% in early trade in Tokyo on Thursday after four consecutive days of gains as concerns about its gaming business re-emerge amid component shortages and competition from heavyweight rivals.
Sony fell almost 13% last month after rival Microsoft (NASDAQ:MSFT) announced it was buying "Call of Duty" developer Activision Blizzard (NASDAQ:ATVI), but more recently recovered some ground as the group made its own deal for "Destiny" developer Bungie.
The Japanese conglomerate on Wednesday reported an estimate-smashing third quarter profit on the back of strong box office receipts for Spider-Man: No Way Home" and a one-off gain, while its gaming unit squeezed out a quarterly profit rise in part due to lower costs.
Sony is struggling to produce enough PlayStation 5 (PS5) units to meet demand amid component shortages and logistics snarl-ups. It sold fewer units - 3.9 million - in the third quarter than in the same period a year earlier.
The bottlenecks forced a downgrade to Sony's full-year PS5 sales target to 11.5 million units from 14.8 million units. Console makers often take a hit on new hardware sales as they build out their install base.
There is also speculation Sony will be forced to follow Microsoft's move to offer games on its Game Pass subscription service, potentially squeezing margins.
"We see divisional profitability coming under much pressure going forward," Amir Anvarzadeh, market strategist at Asymmetric Advisors, wrote in a note.
Sony on Wednesday signalled aggressive plans to maintain its gaming lead, saying it aims to double first-party gaming revenues and launch at least 10 live service titles, which offer continuous and updated play.
"It's actually a big change of course for PlayStation and an area where they were very passive," said Serkan Toto, founder of the Kantan Games consultancy.
"Investors and competitors should take what Sony said about PlayStation's future very seriously," he said.