Sony Group Corp. has adjusted its revenue forecast upward, driven by robust music sales and an unexpected surge from the Chinese video game sensation Black Myth: Wukong, benefiting its PlayStation division.
The Tokyo-headquartered company now anticipates net revenue of JPY 12.71 trillion ($83.2 billion or ₹7,02,023 crore) for the fiscal year ending in March, a slight increase from its prior estimate. Nevertheless, Sony maintained its operating profit guidance, citing a decline in image sensor demand in North America.
The company reported a staggering 73 percent increase in operating profit for the September quarter, exceeding expectations. This remarkable growth underscores the influence of top game titles on the financial performance of Sony’s PlayStation segment, which is currently four years into its latest hardware cycle. Revenue from both external games and its own successful titles, including Astro Bot, contributed to this success, enhanced by improved hardware sales margins. This occurred even as the company experienced setbacks with high-budget live service games like Concord.
During the quarter, Sony sold 3.8 million units of its PlayStation 5 console, prompting an 11 percent upward revision in profit forecasts for its game and network services division.
Masahiro Wakasugi, an analyst at Bloomberg Intelligence, noted that the gaming segment is compensating for the downturn in image sensor demand, while the music sector remains poised for growth.
This week, Sony introduced the PlayStation 5 Pro, which is a high-end, performance-focused version of its flagship console. This move aims to retain gamers as the holiday shopping season approaches and to fend off competition from rival platforms. Upcoming major releases in the next year, such as Capcom’s Monster Hunter Wilds and Rockstar’s Grand Theft Auto VI, are also anticipated to drive sales.
As one of the leading music companies globally, Sony is capitalizing on the surge in popularity of streaming platforms like Spotify. Shares of Spotify Technology SA have more than doubled this year amid positive projections for continued growth. Additionally, Sony’s music division also encompasses smartphone games and anime publishing, both of which are experiencing a significant popularity boost outside of Japan.
However, the company’s film division has not yet fully recovered from last year’s Hollywood strikes involving actors and writers. Executives have also mentioned that declining advertising revenue in India is posing challenges for this segment of the business.
© 2024 Bloomberg L.P.
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