Sony Group Corporation recently announced that it foresees a decline in profit, despite projecting record-breaking sales for PlayStation 5. The Japanese company predicts that it will sell six million more units of the popular gaming console this business year. Nonetheless, it expects weaker financial services sales to offset the gains from gaming, music, and movies, resulting in a 3.2% decline in operating profit to 1.17 trillion yen ($8.65 billion) for the year ending on March 31. This falls below the analysts’ average estimate of a 1.275 trillion yen profit, according to Refinitiv data.
Despite the difficulties of making enough PlayStation 5 consoles to meet demand during the COVID-19 pandemic, Sony’s gaming unit has performed impressively, bringing relief to the conglomerate. Sony aims to sell a record 25 million PS5 consoles this business year, more than double the number sold the previous year, and up from 19.1 million in the previous 12 months. Sony’s gaming and network unit is expected to see profits rise by 8% to 270 billion yen, while earnings at its music and pictures divisions are predicted to be slightly higher this year.
However, Toyo Securities analyst Hideki Yasuda pointed out that sluggish sales of videogame software cast a shadow over the game unit since it is more profitable than the console side. In the last quarter to March, PlayStation 5 sales exceeded three times the amount sold the previous year, reaching 6.3 million units. Still, software sales dropped 3.5%, which raises questions about the correlation between software and hardware sales.
Sony Group President Hiroki Totoki stated at a press briefing that the company could deliver PlayStation 5 consoles to almost any location globally without keeping customers waiting. Sony competes with Xbox maker Microsoft Corporation and Switch provider Nintendo Co Ltd. Sony also predicts that image sensor operating profit will fall by 5.8% to 200 billion yen, with financial services’ profits declining by a fifth. The firm reported a 7.3% fall in overall operating profit for the three months ending March 31, amounting to 128.5 billion yen. Despite this, full-year profit rose to a record 1.21 trillion yen.
