After a Strong Holiday Season, Sony Raises Its PlayStation 5 Sales Forecast

The holidays were a big time for PlayStation 5 console sales. Sony 6758 +0.17%

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PlayStation 5 consoles sold during the December quarter increased by 82% from last year to 7.1 million, the company reported on Thursday. Since the end of December, the company has sold more than 32 million PS5 units.

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The PlayStation 5 has reported huge year-over-year sales growth, which caught Sony management's attention during a question-and-answer session with analysts.

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A broad-based market rally lifted shares of Sony ADR SONY +5.50% (ticker: SONY) to $93.50 in early trading Thursday. There was an increase of 2.8% on the Nasdaq and a 1.3% increase on the S&P 500.

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Additionally, Sony increased its PS5 sales forecast for the current fiscal year ending in March to 19 million units from 18 million units previously.

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On the back of chip shortages and other supply-chain issues, Sony has struggled to meet demand for the PlayStation 5 since it launched in 2020. The supply of parts has eased over the past year, however, helping to improve production capacity.

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With a steady stream of critically-acclaimed blockbusters, Sony is reaping the benefits. God of War Ragnarok, the publisher's first-party game that launched in November, sold more than 11 million copies in its first ten weeks.

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The game division's revenue in the third quarter rose 53% because of that.

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However, Microsoft MSFT +3.57% 's Xbox division has had problems releasing major exclusive titles and meeting development milestones. A 13% decline in Xbox hardware revenue accompanied Microsoft's overall gaming revenue decline for the December quarter. Additionally, several internal gaming studios were laid off by the technology giant last month.

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Consumers purchase gaming consoles for high-quality exclusive games, which explains the disparity in results between the two large platforms.