Sony profits have slide more than analysts predicted with April to June falling 31%
Sales of PlayStation 5, one of the company’s core products, totalled 3.3 million units. The company had announced plans to sell a record 25 million units for the year from April to March 2024. Analysts predicted that selling over 5 million units in the first quarter would set up Sony to reach its annual target, but it did not reach that milestone.
Also in trouble were sales of TV and camera sensors.
Sony Group was also pulled down by lacklustre results from its financial business which had benefited from a property sale in the same period a year earlier.
Profit at its movie division plunged by two-thirds due to lower sales for television content as well as higher marketing costs after the company released more films in theatres, now the Japanese Company is facing new pressures with the Hollywood writers and actors strike set to impact this division.
Sony trimmed its annual sales forecast for the unit by 3% citing the impact of the strikes which have affected production of scripted television shows and films.
Sony Group President Hiroki Totoki claimed that one contributor to the fall in Playstation sales was that “promotions were limited.”
He told analysts: “I think we can still catch up on what we could not reach in the first quarter.”
Image sensors for smartphones, another earnings driver for the company, did not contribute to growth. Sony lowered its annual operating profit forecast from 200 billion yen in April to 180 billion yen, citing “a decline in sales volume of image sensors for mobile devices.”
Totoki said: “Sales are growing, but profits are a little short.” Recovery of the semiconductor market and business confidence in the next few years will be crucial. “We are especially looking forward to the recovery of the Chinese smartphone market,” he said.
There are indications that the usual September rollout of some new Apple iPhone models will be delayed until October or later. This may have hurt Sony’s image sensor business.
Cumulative sales of the console have topped 40 million but the company lacks high-profile upcoming first-party titles.
Nintendo last week reported it has sold 18.5 million units of “The Legend of Zelda: Tears of the Kingdom” since its release in May, helping drive sales of its aging Switch console.
Sony maintained its forecast of a 10% decline in operating profit for the full year.
