Sony has lifted its full-year profit forecast after a stronger-than-expected December quarter, driven by rising demand for smartphone camera sensors, resilient PlayStation software sales and a boost from its expanding intellectual property portfolio.

The Japanese company now expects net profit of ¥1.13 trillion (A$11.4 billion) for the year ending March, up 8% on its previous guidance. Operating profit is forecast to reach ¥1.54 trillion, with revenue lifted to ¥12.3 trillion.

A key contributor was Sony’s imaging and sensing solutions business, which supplies high-end camera sensors used in smartphones.

The company pointed to a gradual recovery in the global handset market, strong shipments tied to a major customer’s latest products — widely believed to be Apple’s iPhone 17 range, and a shift toward larger, more advanced sensors.

Sony’s gaming division delivered a mixed result. PS5 hardware shipments fell 16% year-on-year over the critical holiday quarter to eight million units, bringing lifetime sales to more than 92 million consoles.

Despite the slowdown, operating profit in the gaming unit rose 19%, helped by strong software sales, higher digital downloads and a weaker yen. Sony said it has already secured sufficient memory chip supply for upcoming sales periods, easing concerns around soaring DRAM prices.

Software and network services continue to do the heavy lifting for PlayStation, with Sony reporting record engagement on the PlayStation Network and continued growth in digital game sales and subscriptions.

The upgraded outlook was also supported by a revaluation gain linked to Sony’s increased stake in Peanuts Holdings, owner of the globally recognised Snoopy franchise. Sony has been leaning harder into monetising its IP across games, film, music and streaming, as it reshapes itself into a content-first company.

That strategy includes restructuring its hardware footprint, with plans to spin off its TV business into a joint venture with TCL, and a long-term streaming deal that will see Sony Pictures films flow to Netflix through 2032.

On AI, Sony executives sounded notably upbeat and assured.

CFO Lin Tao said AI is “not a threat” to the company, particularly in gaming, and vowed Sony will adopt it aggressively in production.

“We want to be the disruptor, not the disrupted,” she said.