Sony Q1 Profit Falls as Movie Business Disappoints, PS5 Sales Bring Relief

Japan’s Sony on Wednesday said first-quarter profit tumbled due to weaker performances from its movies and financial businesses.

In April-June, operating profit slid 31 percent to JPY 253 billion ($1.8 billion or roughly Rs. 14,907 crore), in line with estimates.

Profit at its movies division plunged by two-thirds due to lower sales for television content as well as higher marketing costs after the company released more films in theatres.

Once a consumer electronics giant, the conglomerate has transformed itself to focus more on entertainment, developing movies, music and games. It is also a leading maker of image sensors.

In May, Sony said it is examining a partial spin-off of its financial unit, which includes life insurance and banking, as it looks to invest in its entertainment businesses.

Sony has said it expects to sell 25 million PlayStation 5 consoles this financial year, in what would be a record for a PlayStation device, following the easing of supply chain snarls.

Cumulative sales of the console have topped 40 million.

Nintendo last week reported it has sold 18.5 million units of The Legend of Zelda: Tears of the Kingdom since its release in May, helping driving sales of its aging Switch console.

Gaming market research firm Newzoo said Tuesday that global video games market would return to growth in 2023 on the back of strong sales of consoles such as Sony’s PlayStation 5. Newzoo said it expects industry revenue to rise 2.6 percent to $187.7 billion (roughly Rs. 15,54,231 crore) in 2023, driven by a 7.4 percent rise in console sales in the year. Gaming revenue fell 5 percent in 2022, according to the research firm’s data.

Last month, Sony’s film division delayed a host of upcoming major releases in light of the ongoing writers’ and actors’ strikes in Hollywood. Spider-Man: Beyond the Spider-Verse has been taken off its planned March 29, 2024, release date. Spider-Man spinoff Kraven the Hunter, which was originally eyeing a release on October 6, has been pushed by almost a year to August 2024.

© Thomson Reuters 2023