TOKYO, Feb 3 (Reuters) - Shares in Sony Group Corp (6758.T) 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 (MSFT.O) announced it was buying "Call of Duty" developer Activision Blizzard, 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.
All 3 Wall Street benchmarks ended higher overnight, but the mood turned sour in post-market trade when Facebook-owner Meta Platforms plunged as much as 22 per cent after missing analysts' earnings estimates and posting a weaker-than-expected forecast.
"The Japanese market was dragged down by declines in US futures this morning, which fell because of the losses in Meta shares outside trading hours," said Takatoshi Itoshima, a strategist at Pictet Asset Management.
"And, Japanese companies seemed to have lost their momentum," Itoshima said, adding forecasts of some companies were strong but the overall growth in profit had slowed.
Shares of Sony Group fell 6.08 per cent after 4 straight sessions of gains, as concerns about the company's gaming business re-emerged amid component shortages and competition from bigger rivals.
Other technology heavyweights also fell, with chip-making equipment maker Tokyo Electron losing 2.3 per cent and medical technology platform M3 shedding 9.19 per cent.
Japan Airlines lost 1.91 per cent after the airliner forecast an annual net loss of 146 billion yen (S$1.7 billion).
Rival ANA Holdings fell 0.88 per cent.
Bucking the trend, NTT gained 1.68 per cent after a report said the phone company's operating profit for the 9 months through December would rise 3 per cent to about 1.55 trillion yen. REUTERS
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