When the pandemic first hit in early 2020, many stock experts forecasted the potential for a drastic retraction in stock prices and for many businesses to reach all time lows in terms of the value of their shares.
However, many businesses fought back against this expectation, particularly technology or e-commerce based companies. With the increased restrictions meaning that many could not safely leave their homes – the demand for even more accessible ways of buying became apparent.
Sony was one of these companies that produced an exponential growth in value over the course of the most tumultuous days during the height of the pandemic. Yet how were they able to accomplish this?
Profits Unlike Ever Before
During the final quarter of 2020, figures from findbettingsites.co.uk show that Sony saw a 20% increase in the previous year’s final quarter profits. With an average of £2.5 billion made in operating profits, Sony were able to reclaim their status as one of Japan’s most profitable and innovative technology based companies.
Going into the past year, Sony only anticipated an annual profit of £4.9 million, after production and labour costs had been deducted, yet now that they have seen such an exponential growth in sales and revenue, it is far more probable that this figure could rise to £6.5 million.
This unprecedented increase in Sony’s profit emphasizes truly how powerful the technology industry is and how it holds the power to revolutionise the world and the economy, by simply producing their biggest earners – video games.
What Caused This Growth?
Under normal circumstances, Sony’s affiliate film companies would have likely been the cause of a spike in earnings, given that a successful film was released and distributed under the parent company. However, due to pandemic circumstances, a majority of blockbuster filming has been ceased over obvious safety concerns.
Yet with so many consumers restricted predominantly to their homes due to quarantine and national lockdowns, video games have presented a recreational escape from the current reality. For consumers ranging from children to adults, video games provide a way of spending their downtime engaging in an immersive world of characters and storylines.
So it is unsurprising that Sony has witnessed an exponential growth in their Playstation consoles and games under their brand. However, as late November 2020 arrived, Sony released their highly anticipated Playstation 5, which offers an unparalleled gaming experience and allows gamers to experience this firsthand.
Selling over 4.5 million consoles, Sony boasted a 9% profit increase in comparison to the previous December, suggesting how proportionately the Playstation 5 outperformed all previous expectations. With retailers such as Amazon and John Lewis being unable to keep up with consumer demand, it quickly became clear that Sony had surpassed all of their established goals.
What Does This Mean?
For Sony, their huge level of growth throughout the pandemic represents that despite the pandemic they can still thrive by producing state of the art, high quality products that pique the interest of consumers. This also likely means that Sony will continue to mass produce and appropriately market their products in order to appease the consumer demand.
Additionally, it is highly probable that Sony will try to sustain the immense traction that the Playstation 5 has received by releasing special edition products that emulate consumers desire for products that are innovative and enjoyable.
Overall, Sony’s unprecedented growth throughout the pandemic has meant that they will be able to continue to expand their success and retain repeat buyers throughout the pandemic as it ensues and in the months following.