Sony forecasts higher games profit but lower sales amid memory price surge
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TOKYO, May 8 : Sony forecast on Friday a higher annual operating profit but lower sales in its gaming business, with overall profit expected to climb 11 per cent to 1.6 trillion yen ($10.20 billion) for the year ending March 2027.
While the PlayStation maker has received plaudits for its transformation into an entertainment powerhouse, market concern about the impact of artificial intelligence on its business and a perceived lack of growth catalysts have weighed on its shares in recent months.
Investors are also fretting about the impact of a memory-chip price surge and disruption to supply chains from the Iran war on margins at electronics manufacturers including Sony and peer Nintendo, which also reports on Friday.
Sony said it expected sales at its gaming business to fall 6 per cent on lower hardware sales with profits to rise 30 per cent to 137 billion yen due to higher first-party software sales and the absence of an impairment loss it recorded a year earlier.
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PlayStation 5 hardware sales are based on the amount of memory it can secure at "reasonable prices", with hardware profitability expected to be similar to a year earlier.
Sony's shares were up 6 per cent in Tokyo after ending the morning session down 1.6 per cent.
The firm said it sold 16 million PS5 consoles in the last financial year, 14 per cent fewer than a year earlier.
The platform is expected to receive a major boost from the launch of Take-Two Interactive's delayed "Grand Theft Auto VI", which is scheduled for release in November.
"Sony's bottom line stands to benefit significantly from the high-margin software sales and ecosystem engagement this launch should trigger," Amir Anvarzadeh of Asymmetric Advisors wrote in a note.
Sony said operating profit for the year ended March rose 13.4 per cent to 1.45 trillion yen, below an LSEG consensus estimate of 1.56 trillion yen.
While Sony's growing businesses include anime, which is finding a global audience, the company has abandoned plans to launch electric vehicles with automaker Honda.
($1 = 156.8900 yen)
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