Sony Plans Financial Services IPO as PS5 Sales Cool

Electronics/entertainment giant Sony plans to take its financial services unit public next fall.

The company announced the partial spin-off of Sony Financial Group (SFGI), a business that includes banking and payment services, as it released quarterly earnings on Wednesday (Feb. 14).

“Under the plan, Sony plans to distribute slightly more than 80% of its shares of SFGI to Sony’s shareholders through dividends in kind as a result of the spin-off, and to hold slightly less than 20% of shares of SFGI after the execution of the spin-off,” Sony said in its announcement.

Assuming Sony’s board approves this plan in May, the company intends to take its financial services operations public in October 2025.

The announcement came as Sony reduced its revenue outlook, projecting that sales of its lead product, the PlayStation 5 (PS5) gaming console would sell less than previously forecast.

“Looking ahead, PS5 will enter the latter stage of its life cycle,” said Naomi Matsuoka, senior vice president, per a report by Bloomberg. “As such, we will put more emphasis on the balance between profitability and sales. For this reason, we expect the annual sales pace of PS5 hardware to start falling from the next fiscal year.”

The company’s sales news is happening as consumers are spending less on nonessential purchases due to ongoing economic pressures.

The PYMNTS Intelligence report “Consumer Inflation Sentiment Report: Consumers Cut Back by Trading Down,” found that 69% have reduced nonessential spending on retail goods specifically because of high inflation. In addition, 41% of retail shoppers say this has been the most substantial change to their shopping habits.

The news follows reports from last month that Sony’s India unit was preparing to call off a $10 billion merger with Zee Entertainment due to an impasse over the question of whether Zee CEO Punit Goenka would continue to head the new company.

“Talks with Zee are not advancing, but we think India is a promising market with high growth potential over the long term,” Sony Chief Operating Officer Hiroki Totoki said on a call after the earnings report, per Bloomberg. “If there’s anything that can replace the Zee deal, we’d like to consider it actively.”