Sony posted strong revenue growth in its fiscal first quarter thanks to resilient gaming and music businesses, but it’s faltering on earnings. In the months of April to June, the Japanese group increased its sales by 33 percent to 2.9 trillion yen (18.8 billion euros), the company announced on Wednesday. At the same time, consolidated operating profit fell by 31 percent to 253 billion yen (1.6 billion euros), but was still above expectations.
The gaming division contributed the largest item, with sales increasing by 168 billion yen to 772 billion yen (4.9 billion euros). Sony sold a total of 3.3 million Playstation 5 game consoles in the past quarter. That was significantly more than in the first quarter of the previous year, when production was still lagging behind demand.
Goal: 25 million Playstations
However, the demand for the Playstation is weakening. In the final quarter of the previous financial year (January to March), Sony had sold 6.3 million units of the Playstation 5. Nevertheless, the company is sticking to its forecast for the full year and is still aiming for the mark of 25 million game consoles sold. Sales campaigns should help with this. So far Sony has sold a total of 40 million Playstation 5.
Although the photo division was able to increase sales from 238 to 292 billion yen (1.9 billion euros), at the same time the operating result fell by almost half to 12.7 billion yen (80 million euros). The company is concerned about the smartphone market, for which Sony supplies its camera modules. Due to weaker demand in the USA and China, the Japanese no longer expect the smartphone market to recover this year.
Film division is weakening
Sales of the film and television division fell by 6 percent to 320 billion yen (around 2 billion euros). Due to high marketing costs and less license income for TV and streaming series, the operating result collapsed by two-thirds to 16 billion yen (102 million euros). With “Spider-Man: Across the Spider-Verse” Sony only had one blockbuster in the quarter. In view of the ongoing strike in Hollywood, the company expects earnings in the film business to continue to stagnate.
The financial services and insurance division made a significant contribution to the decline in consolidated operating profit. Despite tripling sales to 681 billion yen (4.3 billion euros), operating profit fell by more than 60 percent to 54 billion yen (343 million euros). .
The bottom line at Sony is a consolidated profit of 218 billion yen (1.4 billion euros), which is 17 percent less than in the same quarter last year.
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