By Tae Kim 

Sony PlayStation 5 consoles flew off the shelves during the holiday quarter.

On Thursday, the company reported it has sold 7.1 million PlayStation 5 consoles during the December quarter -- up 82% from the prior year. It also said it has now sold more than 32 million PS5 units as of the end of December.

During a question-and-answer session with analysts, Sony management said they are "not concerned" about maintaining their demand momentum for the PlayStation 5 after reporting the large rise in year-over-year sales.

In early trading Thursday, Sony ADR (ticker: SONY) shares rose 4.4%, to $93.50 amid a broad-based market rally. The Nasdaq was up 2.8% and the S&P 500 was up 1.3%.

The consumer electronics company also increased its PlayStation 5 sales forecast to 19 million units from the prior guidance of 18 million units for the current fiscal year ending in March.

Since the PlayStation 5 launched in 2020, Sony has struggled to meet demand for its consoles during the pandemic on the back of chip shortages and other supply-chain issues. But production capacity has improved over the past year as parts shortages have eased.

Sony is benefiting from their strong and consistent output of critically-acclaimed blockbuster games. For instance, the publisher's God of War Ragnarok has sold more than 11 million copies in its first 10 weeks since its launch in November, making it the fastest-selling Sony first-party game ever.

That's part of the reason Sony's overall gaming division revenue rose by 53% in the December quarter.

In contrast, Microsoft's Xbox division has had difficulties meeting its development milestones and releasing major exclusive software titles. For the company's December quarter, Microsoft's overall gaming revenue fell 13% year-over-year, including a 13% decline for Xbox console hardware. In addition, the technology giant implemented layoffs last month at several of its internal gaming studios.

The disparity in results between the two large gaming platforms is more evidence consumers buy gaming consoles to play high-quality exclusive games.

Write to Tae Kim at tae.kim@barrons.com

(END) Dow Jones Newswires

February 02, 2023 12:23 ET (17:23 GMT)

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