As the Sony Group pushes further into the B2b and content production and licencing markets their consumer business is starting to wobble with PlayStation sales falling and their sound and TV business coming under intense pressure, also causing problems is arch rival Nintendo who is capturing a large share of the younger gaming market.

While the Japanese business reported higher quarterly earnings, due to revenue flow from their music and movie businesses, the Company is anticipating a fall in net profit for the current fiscal year due partly to the impact of U.S. tariffs executives said late yesterday in Tokyo.

Fourth-quarter revenue dropped 24% to 27.9 billion Australian dollars. Operating profit increased for its music and movie businesses but fell for its game business.

The Company is also losing share in the TV market due to the emergence of Chinese brands and under pressure in the camera sensor market due to Samsung stripping share from the Company.

Sony PlayStation Portal.

The Company expects U.S. tariffs to lower operating profit by US$678.1 million, for the year that began in April.

Chief Financial Officer Lin Tao said U.S. tariffs would affect its game, entertainment electronics and image-sensor businesses.

The projection took into account the various measures the company would need to take, such as price increases and changes in shipping locations, she said.

According to their latest financials sales of their Games & Networking services are down 370% while Music sales are up 7.4%.

Entertainment and Technology Service sales which takes in TV are down 129%.

Tao said the company has been diversifying its production sites for the PlayStation 5 and building inventory in the U.S. to deal with tariffs.

Sony A1 II

Sony A1 II

She said the PlayStation and related products are produced mainly in four countries, including China.

Tao said the company expects to ship 15 million PlayStation 5s this fiscal year, this is down from the 18.5 million units sold in the previous year.

Chief Executive Hiroki Totoki acknowledged that producing hardware like game consoles in Japan could help address tariff issues for the Company however this could push up the cost of consoles.

Currently Sony manufactures their PlayStation 5 consoles in several Countries whether or not it will manufacture them in the U.S. isn’t an urgent matter, he said. That is something the company can consider going forward, he added.

During the past few years Sony has spent billions on acquisitions to boost its entertainment content.

The company bought U.S. videogame maker Bungie in 2022 and anime-focused U.S. streaming service Crunchyroll in 2021.

In January, Sony acquired an additional stake in major Japanese publishing house Kadokawa for more than $300 million.

It said it would explore initiatives such as making live-action films and television dramas using intellectual property from Kadokawa.

Sony said Wednesday that net profit rose 4.6% from a year earlier to A$2.1 billion for the three months ended March.

For the year that began in April, it projected net profit to fall 13%.

Rival videogame maker Nintendo forecast higher annual profit last week, counting on a boost from sales of the long-awaited Switch 2 console, which is set to hit the market next month. It expects to sell 15.0 million Switch 2s this fiscal year.