Sony Profit Jumps 22%, Lifts Full-Year Outlook
Synopsis
Sony Asia-Pacific News Sony Posts Profit Increase on Video Games, Music and Movies. The Sony Group said today that its quarterly operating profit surged 22 percent to 515 billion yen ($3.28 billion), helped by strong sales of video games, movies and music. The strong result, that received a boost with record profits in its music and imaging operations, has led the company to also upgrade its full-year profit outlook to 1.54 trillion yen. Its PlayStation operation is stalling amid slowing console sales and a looming “chip famine” for memory parts, but Sony’s wide-ranging business model spanning Snoopy merchandise to smartphone sensors is helping the tech giant stay ahead of the curve.
TOKYO — Sony Group announced a blockbuster December quarter on Thursday, saying that its operating profit rose 22% to 515 billion yen ($3.28 billion). Those easily topped what investment experts who follow the stock market had predicted, showing that the company’s strategy of “creative entertainment” is still paying off even as its most famous product, the PlayStation 5, has grown older.
The company’s revenue for the quarter was 3.71 trillion yen ($23.7 billion). After posting these strong numbers, Sony increased its full-year profit target by 110 billion yen. Investors cheered the news, driving up Sony’s stock more than 5% in morning trading before it became flat as the broader market fell. Console sales have slowed; which parts of Sony are pulling the weight these days?
The PlayStation Profit Toll of the “Chip Famine”
Sony is making more money, but its gaming business has a tough road ahead. Hardware sales for the PlayStation 5 this quarter dropped by 16% to 8 million units from 9.5 million at the same time a year ago. The console, which went on sale in 2020, is now nearing its end of life.
A larger worry for the year ahead is the spike in prices of DRAM memory chips. As AI companies and data centre operators vie for virtually all available supply, memory prices are poised to spike a whopping 95% this quarter alone. Experts warn that it could make it nigh-impossible for Sony to discount the PS5 as deeply as they’d normally do at this point in a console’s lifecycle, possibly keeping PS5 prices high until 2027.
Music and ‘Snoopy’ to Lead the Way
Offsetting the gaming woe was record performance in Sony’s music and imaging operations. The division’s revenue climbed by nearly 13%, thanks to explosive streaming gains and live events. Sony also enjoyed a lift from its recent transaction to assume total ownership of Peanuts Holdings (home of Snoopy), which added billions to its bottom line.
Revenue rose by 20% at this unit, which manufactures the camera sensors that pervade all but a few top-tier smartphones. Phone makers are snapping up more of Sony’s high-end sensors as they release smarter, A.I.-powered cameras.
Navigating a “Tricky” Global Economy
What also buoyed Sony’s performance during the quarter was a weak Japanese yen, which makes any money Sony earns in U.S. dollars worth more once repatriated back to Japan. But the company remains cautious about what lies ahead.
Its management has maintained its loss estimate from American tariffs at around 50 billion yen for the year. As trade rules change around the world, Sony is getting ready to make more of its products elsewhere to remain agile. For now at least, the message to investors is plain enough: Sony is no longer just a “gaming company”, it’s a risk-diversified entertainment empire that can turn a buck even when its hardware sales are tanking.
Key Highlights
- Operating profit surged 22 percent, to 515 billion yen, also bettering the most optimistic of market expectations.
- PS5 console sales dropped 16 percent, and a global shortage of memory chips is pushing up the price to build hardware.
- The company was led by growth of more than 12% at Sony’s Music and Smartphone Sensor divisions, which grew over 20%.
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