Sony lowers its forecasts, but wants to be reassuring on the PlayStation

“Conditions are improving,” said Sony CFO Hiroki Totoki, promising that the volume of PS5s available would “significantly increase” in the second half of 2022-23. (Photo: 123RF)

Tokyo — Japanese giant Sony lowered its full-year profit forecast on Friday, expecting worse-than-expected results, particularly in its video game division due to recent acquisitions, but betting on PlayStation production to boost sales.

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,” said Sony CFO 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 units of PS5 by the end of its current fiscal year at the end of next March, following 11.5 million sold in 2021/22.

According to him, the 26% year-on-year drop in sales of games for PlayStation 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 might straighten as the PS5 becomes more available.

Sony, engaged in a war of purchases of video game studios with its American rival Microsoft, has also warned that its accounts will be weighed down this year by its acquisition of the American game publisher Bungie (creator of the franchises “Halo” and “Destiny”) for US$3.7 billion, finalized this month.

If the amount pales in comparison to the US$69 billion put on the table by Microsoft to absorb the American giant Activision (“Call of Duty”, “World of Warcraft”, “Candy Crush”…), this takeover will however allow Sony to benefit from Bungie’s experience and technological expertise in the field of online games and services, where it wishes to develop its offer.

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Sony on Friday maintained its operating guidance for all of its other divisions, noting the remaining uncertainties regarding economic conditions in the coming months.

The Japanese firm now forecasts full-year net profit of 800 billion yen (5.9 billion euros) for the full year, compared to a previous forecast of 830 billion yen, which would be a decline of 9%. over a year.

The group has also revised its operating profit forecast downwards to 1,110 billion yen (8.1 billion euros) once morest 1,160 billion yen previously. This would represent a decline of 7.7% compared to 2021/22.

On the other hand, it very slightly raised its annual sales forecast to 11,500 billion yen (84.4 billion euros, +16% over one year), expecting to benefit for its music, cinema and consumer electronics divisions. public of the weakness of the yen, which artificially boosts its income abroad.

In the first quarter of 2022/23, Sony had a better performance than a year earlier in its cinema division, thanks to currency effects, rights revenues for television broadcasts and a good performance in cartoon streaming, and in his musical activity.

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 climbed 10% to 307 billion yen (2.2 billion euros) and its sales rose 2% to 2,311.5 billion yen (17 billion euros).