By Sam Nussey
TOKYO ― Japan’s Sony on Thursday raised its full-year outlook after reporting record quarterly operating profit, boosted by gains for its image sensor and music divisions as well as a weak yen, even as PlayStation 5 sales slid.
Operating profit climbed 22% to ¥515bn ($3.3bn) ― 9% more than an LSEG consensus estimate — as Sony hiked its annual forecast by 8% to ¥1.54-trillion.
The Japanese conglomerate has, over the years, made a successful pivot from household electronics to entertainment but has seen its share price slide in recent months as investors question what its future drivers of growth will be.
Sales of image sensors, which are used in smartphones, increased 21%. Sony’s music business, home to singers such as Beyonce, Adele, SZA and Shakira, saw a 13% rise in revenue from streaming services, live events and merchandising in recorded music.
The Japanese conglomerate also announced an expansion in its share buyback scheme with shares jumping on the results before closing flat.
PlayStation Network
Sony sold 8-million units of its PlayStation 5 console, which is in its sixth year on the market, in the October-December quarter — a 16% decline from the same period a year earlier.
But the company reported a bump in monthly users on its PlayStation Network, reflecting greater engagement with the platform.
Profit at the gaming unit grew 19% to ¥140.8bn helped by higher sales of software and a weaker yen.
The higher profits from Sony’s gaming business come as many other tech companies warn that surging memory chip prices could disrupt supply chains across various products from smartphones to laptops and increase consumer prices.
On Wednesday, shares of gaming peer Nintendo slumped amid concern over the effect of rising chip prices on margins while chip supplier Qualcomm’s stock also tumbled in after-hours trade after a disappointing second-quarter outlook due to the memory chip crunch.
Sony has already secured the minimum quantity of memory needed to manage the next year-end shopping season, CFO Lin Tao told an earnings briefing.
The company will further negotiate with suppliers to meet customer demand, Tao said.
Video games
The adoption of AI in the video games industry has also created uncertainty, with gaming stocks falling in recent days on the introduction of an AI-powered game-making tool by Alphabet’s Google.
Sony’s console business is expected to receive a boost from the launch of Take-Two Interactive’s delayed “Grand Theft Auto VI”, which is scheduled for release in November.
“GTA VI” will “lead to eye-popping sales for the PS5 — most probably the best quarterly sales for any PlayStation model ever,” said Serkan Toto, founder of the Kantan Games consultancy.
Sony said it would expand a share buyback that runs to May to up to ¥150bn from ¥100bn previously.
