PlayStation DualSense controller and PlayStation 5 console are seen in this illustration photo taken in Krakow, Poland on April 9, 2022.
Jakub Porzycki | Nurphoto | Getty Images
Sony on Wednesday reported a 31% fall in profit in the first fiscal quarter as its life insurance unit dragged on its bottom line, but the company raised full-year sales forecasts on the back of expected strength for its PlayStation gaming business.
Here’s how Sony did in the June quarter versus Refinitiv consensus estimates:
- Revenue: 3 trillion Japanese yen ($20.7 billion) versus 2.46 trillion yen expected. That represents a 33% year-on-year rise.
- Operating profit: 253 billion Japanese yen versus 251.24 billion yen expected. That marks a 31% year-on-year fall.
Sony said its operating income suffered from significant decreases in profit from its financial services and movies and pictures businesses. Profits from Sony’s financial services branch plunged by 61% in the fiscal first quarter — which the company attributed to changes in interest rates related to variable life insurance.
Movies-wise, Sony had a solid performer this year in the form of Spider-Man: Across the Spider Verse which grossed $633 million at the box office. There have been other, hotly-anticipated movies this year which performed better, such as Universal Pictures’ Oppenheimer and Warner Bros’ Barbie.
Sony reported a 6% decrease in revenue and a 68% slump in profit at its pictures division. The company blamed the disappointing performance on strikes carried out by the Writers Guild of America and other unions, in protest against using artificial intelligence to generate movie scripts.
Nevertheless, Sony raised its revenue forecast for the full year by 6% to 12.2 trillion yen, thanks to strength in its PlayStation gaming unit. Sony made a 7% upward revision to its sales forecast for games and network services to 4.2 trillion yen. Its forecast for profit remained unchanged at 270 billion yen, (edited)
Sony is anticipating a bumper year for its PlayStation gaming business. The company previously said it expects to sell a record 25 million PlayStation 5 units in the current financial year, which ends on March 2024 — compared with 19.1 million units in the previous year.
Sony sold 3.3 million units of the PlayStation 5 in its April-June quarter, up 38% year-over-year. The numbers are softer compared with the December quarter, when consumer electronics tend to do well thanks to the holiday shopping period. But it’s still a solid result on the back of macroeconomic weakness which has caused consumers to tighten their purse strings.
Sony is so far winning the latest round of the console wars — by a substantial margin. Microsoft’s Xbox Series X, which has been out since November 2020 along with the PS5, has sold far fewer units than Sony’s new PlayStation overall. The two mega gaming companies have been at loggerheads over Microsoft’s $69 billion acquisition of Activision Blizzard, which has been the subject of intense regulatory scrutiny.
Sony said it expects its imaging sensors business to perform weakly, citing the impact of dwindling smartphone sales and a slow economic recovery in China.
Sony flagged that it expects profitability for its latest console to deteriorate in the full year due to changes in promotions in certain geographic regions. Sony, like many console makers, sells consoles at a discount or in bundles with other games to boost sales, particularly over busy shopping periods like Christmas and Black Friday.
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