Sony hikes forecasts on strong music business

TOKYO

Japanese electronics giant Sony yesterday upgraded its annual sales and net profit forecasts, driven by strength in its music business and favorable foreign exchange rates.

The conglomerate said its annual net profit for the year to March 2024 should reach 860 billion yen ($6.0 billion), up from a previous estimate of 840 billion yen.

Its overall sales forecast was upgraded to 12.2 trillion yen from 11.5 trillion yen.

The company said it expected to see stronger gaming software sales and lower costs for the segment, while healthy foreign exchange moves were seen boosting sales in a wide range of its business fields, including games, music and movies.

But falling profitability of PlayStation hardware, partly due to sales promotions, was driving down profits, the company added.

For the financial first quarter, the company said net profit fell 16.7 percent to 217.9 billion yen, as losses in the financial and movie businesses overwhelmed strong gains on the music side.

Sales rose 32.9 percent to 2.96 trillion yen in the period.

April-June saw Sony sell 3.3 million PlayStation 5 consoles, up from 2.4 million units during the same period last year.

"This is a 38 percent increase, and even though the first quarter figure is slightly below our target, we will probably be able to catch up by the end of the calendar year" so that the company will achieve an annual sales target of 25 million units, chief financial officer Hiroki Totoki told reporters. 

The sales increase in gaming software contributed to profits in the sector, the company added.

Sony's music segment was seen enjoying both stronger sales and a one-off accounting gain related to a subsidiary, the company said.

The movies segment suffered pressure from the ongoing Hollywood strikes, although a strong performance during the first quarter and foreign exchange moves supported the segment overall, it said.

Asked about the impact of generative AI platforms on the business, Totoki said "there would be [positive] potentials not only in films but also in development of games."