Sony profit slides on chip slump keep PS5 sales target. During the July-September quarter, Sony’s (6758.T) operational profit decreased by 29% due to the firm being negatively impacted by poorer performance at its image sensor and finance divisions.
Profit for the period was 263 billion yen, equivalent to 1.74 billion dollars. This compares to an estimate of 306 billion yen given by ten analysts surveyed by LSEG.
The Japanese tech company has transitioned from inventing classic home gadgets such as the Walkman to becoming an entertainment powerhouse that spans games, movies, and music and a prominent manufacturer of image sensors. One of its most famous products was the Walkman.
The semiconductors segment of Sony’s business had a 37% decrease in profits due to increased expenditures and decreased sales of image sensors, which are utilized in smartphones.
“The North American market shows a significant year-on-year decline, and at this point there’s no change to our view that a recovery in the market will take place from next fiscal year,” Sony President Hiroki Totoki said at a news briefing. “There’s no change to our view that a recovery in the market will take place from next fiscal year.”
Sony has not changed its sales goal for the current fiscal year, which is set at 25 million PlayStation 5 (PS5) consoles. The firm hopes to achieve this goal with the help of a new, more compact version of the gadget.
Totoki stated that the PS5 goal could not be achieved with a great deal of ease. Second-quarter sales of the PlayStation 5 were 4.9 million units, increasing the total number of PS5 consoles sold during this fiscal year to 8.2 million units. Next week, a portable accessory will be available for purchase that establishes a connection to the PS5 over WiFi.
The recent news that gaming head Jim Ryan would retire in March of next year surprised many people who follow the industry. That developer, Bungie, will eliminate workers amid significant layoffs in the gaming sector.
Sony reported that five million copies of “Marvel’s Spider-Man 2” were sold by the end of the month following the game’s release on October 20. This is encouraging news moving into the crucial holiday shopping season at the year’s end.
The competitor, Nintendo (7974.T), has been on a roll recently, scoring several hits despite the business not focusing on developing cutting-edge visuals like Sony and Xbox creator Microsoft (MSFT.O). Instead, Nintendo continues to attract players.
Sony has increased its full-year sales prediction for the games unit by about 5%, bringing the total to 190 billion yen, but keeping its profit forecast the same.
Increased sales of third-party games helped the company’s earnings during the second quarter, but increased hardware losses hurt them. The announcement that the movie division of Sony will co-finance and distribute a live-action adaptation of Nintendo’s famed “Zelda” property has led observers to speculate about the likelihood of more collaboration between the two big Japanese entertainment firms, Sony and Nintendo.
Jefferies analyst Atul Goyal said in a client note before Sony’s earnings that “Sony’s strong distribution network and publishing track record could make it a strategic move for Nintendo.” Goyal’s comments were made in anticipation of Sony’s earnings.
The company’s projection for its operational profit for the entire year remained unchanged at 1.17 trillion yen, although it increased both its sales and net income projections by 2% each.
Before releasing Sony’s earnings report on Thursday, the company’s stock closed down 0.8%. Up to this year, they have increased by 32%.