Sony hikes profit forecast but says PS5 sales to slow
Sony saw ‘significant increases’ in sales in its financial services, game and network, sensors, music and pictures segments
Tokyo – Japan’s Sony upgraded its annual net profit forecast on Wednesday but trimmed its PlayStation 5 unit’s sales target, with the flagship console currently in its fourth year on the market.
The conglomerate now predicts a full-year net profit of 920 billion yen ($6.1 billion) instead of its previous target of 880 billion yen.
One reason for the more ambitious outlook is net gains on investments at Sony’s life insurance business, the company said, announcing a plan to take its financial services division public in October 2025.
PlayStation 5 sales, meanwhile, are at risk of losing momentum, some analysts have warned, especially in the battle with US rival Microsoft.
Sony said it now expects to sell around 21 million PS5 units in the current financial year — trimming an earlier target of 25 million.
“PlayStation 5 hardware will enter into its fifth year, which will be the latter half of the console’s life cycle,” said Naomi Matsuoka, Sony’s senior vice president.
She told reporters that Sony would “put renewed focus on its profitability”, adding that “we expect its volume sales data to gradually start falling from the next fiscal year”.
When the PS5 was launched in November 2020, supply chain snarl-ups made it difficult to buy.
But those issues have now eased and Sony touted strong software sales and robust user engagement on Wednesday.
Hideki Yasuda, analyst at Toyo Securities, told AFP before the earnings release that Sony’s 25 million unit sales target for the PS5 was “a very high hurdle”.
“Sony had to issue an ambitious target so third-party game-makers would develop and release new games. The company could not set a target lower than for the PS4,” he said.
– Q3 sales rise –
Microsoft has made a strong push to boost its position, including with its $69 billion takeover of Activision Blizzard, the maker of the blockbuster “Call of Duty” games.
Sony’s video game segment scored a hit with “Marvel’s Spider-Man 2”, which was released on the PS5 in October last year and became the fastest-selling PlayStation Studios game in the first 24 hours after release.
“Despite the shot in the arm from its Spider-Man 2 title hit, which has come and gone”, Sony needs to watch its back when Microsoft “launches Activision games, namely Call Of Duty (COD) franchises on its subscription Game Pass offering”, noted Amir Anvarzadeh from Asymmetric Advisors.
For the three months to December, Sony saw “significant increases” in sales in its financial, gaming, sensor, music and pictures segments.
Sales jumped 22 percent to 3.7 trillion yen in October-December for a net profit of 363.9 billion.
The entertainment and electronics behemoth also enjoyed reduced tax expenses related to the dissolution of a subsidiary.
Music industry publication Billboard said last week that Sony had signed a deal worth at least $600 million to buy half of Michael Jackson’s “publishing and recorded masters catalog”.
But Sony has declined to comment on the reported deal, which Billboard said could be the largest-ever valuation of a musician’s music assets.
Strikes in Hollywood last year dragged down the conglomerate’s movie performance, and Sony said Wednesday that the impact would continue into the next financial year.
Sony in January called off a proposed $10 billion merger of its Indian operations with local rival Zee Entertainment.
The collapse is a blow to both firms’ hopes of better competing with streaming rivals such as Disney, Amazon and Netflix in the booming entertainment market of 1.4 billion people.