Sony lowers its profit forecast for the coming months

by time news

The Japanese group is revising its objectives downwards, particularly in the field of video games.

Japanese giant Sony on Friday lowered its profit forecast for its 2022/23 fiscal year, which began in early April, expecting worse-than-expected results in its video game division, in particular because of the cost of recent acquisitions. As part of its strategy to fight against the American Microsoft, its rival in the gaming sector, Sony offered itself this year the American game publisher Bungie (creator of the franchises “Halo» et «Destiny”) for an amount of 3.7 billion dollars.

This takeover was finalized this month, earlier than the group anticipated in its previous forecast, thus weighing more on its profits. Sony now expects full-year net profit of 800 billion yen (5.9 billion euros) for the full year, compared to 830 billion yen last May, which would be a decline of 9% year on year. .

The group has also revised its operating profit forecast downwards to 1110 billion yen (8.1 billion euros) against 1160 billion yen previously. This would represent a decline of 7.7% compared to 2021/22. On the other hand, it very slightly raised its forecast for annual sales to 11,500 billion yen (84.4 billion euros, +16% over one year), expecting to benefit for its music, cinema and consumer electronics divisions. the weakness of the yen, which artificially boosts its income abroad.

Decline in video game sales

In its first quarter of 2022/23, Sony saw its results decline in video games, citing in a statement the impact of lower sales and increased development costs. It did, however, perform better than a year earlier in its cinema division, thanks to revenue from rights for television broadcasts and the good performance of cartoon streaming, and in its music business.

Between April and June, Sony thus made a net profit of 218.2 billion yen (1.6 billion euros), up 3% over one year. Its operating profit rose 10% to 307 billion yen (2.2 billion euros) and its sales rose 2% to 2,311.5 billion yen (17 billion euros).

While Sony is still struggling to meet global demand for its PlayStation 5 console released at the end of 2020, whose production is burdened by component shortages and the disruption of supply chains, the group wanted to be reassuring on Friday. “Conditions are improving,” assured Sony Chief Financial Officer Hiroki Totoki, promising that the volume of PS5s available would “significantly increase” in the second half of 2022/23.

Sony, however, did not raise its target of selling 18 million PS5 units by the end of its current fiscal year at the end of March, after 11.5 million sold in 2021/22. According to him, the 26% year-on-year drop in sales of PlayStation games observed between April and June is explained by the less homelike lifestyles of players compared to the first phase of the Covid-19 pandemic, but the curve could straighten as the PS5 becomes more available.

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