Sony expects profit to slip despite record PlayStation 5 sales

TOKYO: Sony Group Corp on Friday said PlayStation 5 sales will jump by six million units this business year, but forecast its profit will slip from a record high as weaker financial services sales offset gains from gaming, music and movies.

The Japanese company said it expects operating profit in the year to March 31 to fall 3.2% to 1.17 trillion yen ($8.65 billion), lower than an analysts’ average estimate of a 1.275 trillion yen profit, according to Refinitiv data.

The improved performance of its gaming unit, however, will come as a relief to the entertainment and electronics conglomerate after it struggled to make enough PlayStation 5 game consoles to meet demand during the COVID-19 pandemic because of semiconductor supply chain disruptions.

“We can now deliver PlayStation 5 to almost anywhere in the world without keeping our customers waiting,” Sony Group President Hiroki Totoki said at a press briefing after the company announced its results.

Sony, which competes with Xbox maker Microsoft Corp and Switch provider Nintendo Co Ltd, said it expects to sell a record 25 million PlayStation 5 (PS5) consoles this business year, up from 19.1 million in the previous 12 months and more than double the number it sold the year before that.

Sony posts record annual profit driven by chip, music units

For this business year, the company forecast profit at its gaming and network unit to rise by 8% to 270 billion yen.

Toyo Securities analyst Hideki Yasuda said sluggish sales of videogame software, which is more profitable than the console side, cast a shadow over the game unit.

In the latest quarter to March, PlayStation 5 sales more than trebled from a year earlier to 6.3 million units, while software sales fell 3.5%.

“If you buy new hardware, you generally buy software as well. Software sales ought to have grown in tandem with hardware,” Yasuda said.

Sony expects earnings at its music and pictures divisions to be slightly higher this year, with profits from financial services falling by a fifth.

Sony also predicted that image sensor operating profit will dip by 5.8% to 200 billion yen.

The firm said overall operating profit for the three months that ended March 31 fell 7.3% to 128.5 billion yen, with full year profit nudging up to a record 1.21 trillion yen.