Following a report showing first quarter profits tumbled, shares in Sony dropped 6% in Tokyo trading, as investors pondered lackluster performance by the company’s movie and financial divisions. In addition comments by executives regarding demand for games and sensors, as well as a 31% slide in operating profits only increased worries.

After the launch of the Playstation 5 console in 2020 was stymied by supply chain issues during the Covid-19 pandemic, the company has been hoping to make up for lost time now that the supply chain issues have been mostly resolved. However sales for the April-June quarter were below expectations, putting the full-year target of 25 million units in jeopardy.

In the quarter, Sony moved 3.3 million units. Nintendo’s Switch console, which is now seven years old, moved 3.9 million units over the same time period, due to the release of the latest Zelda title.

Sony indicated that a new ad campaign which began in July has triggered an improvement in sales momentum for the PS5.

However, Serkan Toto, founder of the Kantan Games consultancy noted, “Sony started discounting the PS5 in the West, which is never a good sign.”

He added, “The company has a lot of work to do, first and foremost to make sure those blockbuster first-party games come out quicker.”

Sony, which supplied image sensors to the smartphone market for use in cameras, also downgraded forecasts for any recovery in the smartphone market, saying it now does not see a recovery until 2024 as a result of weak demand in major markets.

Sony cut the yearly operating profit forecast for the division by 10% due to lower sales.

Sony noted that in the second quarter, procurement adjustments by smartphone manufacturers were having a major impact.

In a client note, Jefferies analyst Atul Goyal wrote that the current financial year “will be tough” for the sensors unit, however he does expect to see higher margins next year.