Sony raised its annual net profit forecast on Wednesday after a solid first-quarter performance, predicting strong sales in video games and music, as well as image sensors used in iPhones.
The yen’s weakness against the dollar in recent months has fueled withdrawals for the Japanese electronics and entertainment group.
Chief Executive Hiroki Totoki said after the announcement that a rumored takeover bid for US film and TV giant Paramount had been abandoned by the Japanese giant, which decided it was “not a good strategy for us at this time”.
Paramount has agreed to a merger with production company Skydance.
For April-June, Sony posted a six percent year-on-year rise in net profit to 231.6 billion yen ($1.6 billion), beating analysts’ estimates.
The company now forecasts net profit of ¥980 billion in 2024-25, also up six percent year-on-year.
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This is higher than the previous estimate of ¥925 billion, which would have been lower than the 2023-24 result.
Music streaming has been a money maker for Sony, which has an impressive back catalog and whose current roster includes top artists such as Beyonce and Lil Nas X.
“The increase in the number of paying subscribers for streaming services and the expansion of the market in emerging countries” helped boost music acquisition, said senior vice president Naomi Matsuoka.
The overseas success of Japanese pop duo Yoasobi, who were invited to a state dinner in April at the White House for Prime Minister Fumio Kishida, shows that Sony and its subsidiaries “can create hits that transcend national and regional boundaries,” he added.
Sony said user engagement with games remained high in the quarter, with its flagship PlayStation 5 console entering its fourth year on the market.
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In gaming, “Helldivers 2” and the PC version of “Ghost of Tsushima” contribute to the earnings, while upcoming titles include the latest “Astro Bot” and the PC version of the blockbuster “God of War Ragnarok.”
For Sony’s massive movie business, Matsuoka said box office revenue in the United States has been hit by strikes in Hollywood.
However, movies released since June, including “Bad Boys: Ride or Die” and “The Garfield Movie” have already proven to be box office hits, he said.
Yasuo Nakane of Mizuho Securities said before the earnings call that Sony could post a record high profit this year for its image sensors.
Sony could also see record profits next year in gaming under new leadership, it said in a recent note.
“Our short-term outlook includes expectations that CEO of the platform business group Hideaki Nishino will improve the management of the PlayStation 5 supply chain, including procurement, inventory and logistics,” Nakane said.
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Nishino is also expected to “maximize the profits of the PS5 platform through the balancing of hardware, software and network functions,” he said. “We think both are possible.”
Source: AFP