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(Bloomberg) -- The five-year-old PlayStation 4 is delivering more energy — and profit growth — for Sony Corp.’s business, when compared with Nintendo Co.’s much-newer Switch.
Quarterly figures from the two video-gaming rivals showed that Sony is benefiting from its best-ever console cycle, while Nintendo is struggling to expand sales of its play-at-home-or-on-the-go machine. Sony boosted its operating profit forecast yet again, results on Tuesday showed, while Nintendo missed estimates and kept its outlook intact. Sony shares jumped the most in a year on Wednesday, while Nintendo fell.
Game machines tend to follow a predictable cycle of accelerating growth, price cuts and retirement. But Sony is breaking that pattern with a strong collection of gaming titles for the holiday shopping season, including homegrown hit Spider-man, that’s setting up the PlayStation 4 for its best-year ever. Without a fresh crop of new gaming titles and only one planned for the holidays, Nintendo kept its forecast for 20 million Switch shipments unchanged for the fiscal year.
“The PlayStation is doing great, Spider-Man sold like crazy in the second quarter,” said Kazunori Ito, an analyst at Morningstar Investment Services in Tokyo. “On the surface, it’s hard to say this was a good quarter for Nintendo.”
Investors have noticed: Sony shares had been up 15 percent this year prior to the results, while Nintendo is down. On Wednesday, after the earnings, Sony climbed as much as 7.1 percent — its biggest intraday jump in a year — while Nintendo fell as much as 4.7 percent.
Essentially, Sony is taking a page out of Nintendo’s playbook, churning out games made by its own studio; those first-party titles are also more profitable. The PS4 exclusive God of War sold 3.1 million copies during its first three days in April, while last month’s Spider-Man topped that with a record 3.3 million copies over an equal period of time. Nintendo is counting on a single title, the latest iteration of Super Smash Bros. for Switch, to keep momentum going in the last three months of the year.
“Sony is using first-party titles very well — coupled with subscription services like PS Plus, that’s boosting sales of PS4s and extending its life cycle,” Ito said. “It will be painful for Nintendo without more first-party games.”
Sony’s December quarter also looks strong in third-party games with analysts predicting record sales of Red Dead Redemption II after it became the best-reviewed game of the year, according to Metacritic. Call of Duty: Black Ops set a new PlayStation record for first-day digital sales, and other big titles coming this quarter include Battlefield V, Fallout 76 and Just Cause 4.