Sony Group has upgraded its revenue and profit forecasts for the fiscal year ending in March, following a prosperous quarter driven by its music and gaming software sectors. The Japanese entertainment conglomerate reported an operating profit of JPY 279.1 billion ($1.9 billion or approximately Rs. 15,949 crore) for the three-month period ending in June, which exceeded the market consensus of JPY 273.9 billion (around Rs. 15,736 crore) and marked an increase from the previous year’s profit of JPY 253 billion (around Rs. 14,535 crore). The company now anticipates annual sales to reach JPY 12.6 trillion (approximately Rs. 723,995 crore), along with an operating profit of JPY 1.3 trillion (around Rs. 74,697 crore), both of which have been slightly adjusted upward.
The PlayStation division experienced a surge due to the rising popularity of first-party and online multiplayer games, such as Helldivers 2. However, Sony’s report indicated that a significant part of this boost can be attributed to favorable currency exchange rates. The company sold 2.4 million units of the PlayStation 5 console during the quarter, which fell short of analysts’ expectations of three million units.
Morningstar Investment director Kazunori Ito noted, “The PlayStation business is not as robust as the figures suggest, as profits and revenue were significantly aided by the weak yen. Sony had previously indicated that hardware sales would slow this fiscal year, but the actual decline appears to be occurring more rapidly than we anticipated.”
In the music sector, Sony reported that it contributed the largest portion of profit during the quarter, bolstered by its roster of chart-topping artists and the rising global popularity of Japanese anime, which is also under its music division. The company witnessed an uptick in revenue from merchandise sales and live events, alongside increased earnings from streaming platforms such as Spotify. Both its gaming and music sales forecasts were raised by three percent.
Toyo Securities analyst Hideki Yasuda commented, “The music segment has evolved into a lucrative asset that many competitors would envy. It is expected to continue its growth trajectory for the foreseeable future.”
Additionally, improvements in the production yields of Sony’s image sensors resulted in a rise in unit sales during the quarter. According to market research firm IDC, the global smartphone market showed signs of recovery in June, with shipments increasing by six percent. Xiaomi Corp. and Vivo led in their unit expansions among Sony’s customers.
However, analysts cautioned that Sony may encounter new challenges if the yen strengthens once more. Since a substantial portion of its revenue is derived from overseas, including sales of gaming consoles, image sensors, and entertainment licensing, the recent prolonged weakness of the yen has been advantageous for the company’s financial performance.
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