Sony profit jumps as games offset weak movie showing

Sony said on Friday (November 8) its operating profit rose 73% in the July-September quarter, with strong sales in its game and network business helping to offset weakness in movies.

Sony, whose businesses also include music and chips, maintained its profit forecast of 1.31 trillion yen ($8.51 billion) for the year to March, largely in line with the 1.34 trillion yen estimate of 24 analysts polled by LSEG.

Sony’s second quarter operating profit soared to 455.1 billion yen from 263 billion yen a year before, helped by solid sales of image sensors. As well as a rise in third-party software sales, Sony President Hiroki Totoki highlighted improving profitability in its game hardware business.

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“We continue seeing a smooth shift (among consumers) to PS5 from PS4, which is leading to higher software sales also,” Totoki said in an earnings briefing.

Sony generates more than a third of its revenues from the game and network service segment, where profit nearly tripled to 138.8 billion yen during quarter. Sony released an upgraded version of its flagship console with better graphics on November 7.

It raised the game sector’s annual profit outlook to 355 billion yen from 320 billion yen, leading to a slight upward revision of group annual revenue forecast to 12.71 trillion yen.

Although Sony’s sales of its PlayStation 5 were down 22% from the second quarter in 2023 at 3.8 million, it maintained a sales forecast of 18 million units for this financial year.

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The industry is grappling with the rising cost of creating games and Sony said last month it was shutting down two PlayStation developers, including “Concord” developer Firework Studios which launched the game in August.

Sony’s movie sector generated profit of 185 billion yen in the quarter, down from 294 billion yen a year ago, due to the delayed release of movies after Hollywood’s strikes in 2023.