What's going on?

Sony pressed up, down, triangle, R2, square, left, R1 on Wednesday, and � congratulations! � the gaming heavyweight unlocked better-than-expected quarterly earnings!

 

What does this mean?

Some of you have spent your lockdowns baking sourdough, others have dabbled in Zoom-based yoga, but loads of you have picked up a games controller. That demand � as well as the launch of the PlayStation 5 in November � drove revenue in Sony�s gaming division 40% higher than the same time the year before. Throw in a record number of PlayStation Network subscribers and blockbuster sales of its Spider-Man game, and the company�s earnings came in well ahead of analysts� expectations. It did so well, in fact, that it was confident enough to up, up, up its profit expectation for the rest of the year by more than 30%.

Why should I care?

For markets: Chips make the world go round.

PlayStation 5s may be flying off the shelves, but Sony�s been struggling to meet demand. There�s a pandemic-driven shortage of microchips right now, and since they�re used in everything from smartphones to, yep, games consoles, there�s serious competition for the little supply there is. Sony might be hoping the delays won�t impact its lead on its biggest rival: data last week showed it�s sold twice as many PS5s as Microsoft has its XBox Series X console.

Zooming out: You�ve had your fun, Spotify.

This gaming uptick has likewise worked out well for Nintendo, which posted strong quarterly earnings earlier in the week. But the home entertainment boom giveth and taketh away: Spotify, for one, �pulled forward� so many new customers earlier in the pandemic that its outlook for new subscriber numbers fell well short of investors� expectations. And while the number of last quarter�s premium subscribers � which account for the majority of its revenue � topped estimates, investors � who are all about the future, not the past � initially sent the audio streaming giant�s shares down 10%.