Sony posts Q1 profit jump on pandemic demand for devices and content

TOKYO: Sony Corp raised its earnings outlook and reported a jump in first-quarter operating profit on Wednesday as pandemic-led demand boosted sales of PlayStation 5 consoles, TVs, cameras, music and movies.

Operating profit for the quarter ended June 30 rose to 280.1 billion yen ($2.57 billion) from 221.7 billion yen a year earlier, better than the 207.96 billion yen average prediction from 10 analysts, according to Refinitiv.

It raised its profit forecast for the year through March 2022 to 980 billion yen from 930 billion yen, bringing it closer to an average estimate 1 billion yen estimate from 25 analysts.

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Sony has benefited from strong demand for its PlayStation 5 games console as people stay home, although a shortage of semiconductors, which is also affecting the likes of Apple , means it cannot produce enough consoles to meet demand.

Sony in May said it expected to sell 14.8 million PS5 units in the fiscal year ending March 2022. Launched in core markets in November 2020, the console, which sells for as much as $500, quickly sold out.

Sony sees the game console as a way to connect its traditional consumer electronics with its growing content business by encouraging online game downloads and sign-ups for subscription services.

As it streamlines its consumer electronics business, Sony is beefing up its entertainment content and distribution business. In December it agreed to buy AT&T Inc's animation business Crunchyroll with 3 million subscribers worldwide.

Sony also offers movies on Walt Disney Co streaming service and on Netflix.

In May, the company indicated that it would continue to expand its content business through acquisition when it said it would spend 2 trillion yen over the next three years on strategic investments, including a push to expand subscribers to its gaming and entertainment services.