Sony reports record profits from pandemic demand for consoles, TVs, music and movies

Sony raised its earnings forecast Wednesday after record-breaking first-quarter operating profit, fueled by pandemic demand for PlayStation 5 consoles, TVs, music and movies that never leave the house.

Operating income for the quarter ended June 30 rose to 280.1 billion yen (approximately Rs 18,970) from 221.7 billion yen (approximately Rs 15,010) a year earlier, exceeding the 207.96 billion yen (approximately Rs 14,080) expected by the age of 10. Refinitiv Eikon analysts showed the data.

He raised his profit forecast for the year to March 2022 to 980 billion yen (approximately Rs 66,360) from 930 billion yen (approximately Rs 62,965), bringing it closer to the average of 1 billion yen (approximately Rs 680). rating from 25 analysts.

Sony expected the growing pandemic demand for its devices and content to subside as the coronavirus quarantine eased, but restrictions are still widespread with new waves of COVID-19 infections sweeping the world.

However, the shortage of semiconductors, which is also affecting companies like Apple, means it cannot produce enough PlayStation game consoles to meet demand.

These supply chain constraints could also affect the production of other consumer electronic devices, CFO Hiroki Totoki said in a briefing following Sony’s results.

“We use a lot of semiconductors and that’s a concern,” Totoki said. “We cannot calm down,” he added.

Sony announced in May that it plans to sell 14.8 million PS5s this fiscal year. Released in major markets in November 2020, the console, which retails for under $ 500 (roughly Rs 37,110 crore), sold out quickly.

Sony has received enough chips to meet this production target, Totoki said.

Sony is looking at the game console as a way to connect its traditional consumer electronics with its growing content business by encouraging online game downloads and subscriptions to subscription services.

By optimizing its consumer electronics business, Sony is expanding its entertainment and content distribution business. In December, he agreed to buy AT&T’s animation business Crunchyroll, with 3 million worldwide subscribers.

In June, she bought Housemarque, a Finnish gaming software company.

Sony is also increasing its movie offerings on streaming services offered by Walt Disney and Netflix. as the pandemic delays the release of films in theaters.

However, higher production costs have lowered margins, the company said.

In May, the company said it would continue to expand its content business through acquisitions when it said it would spend 2 trillion yen over the next three years on strategic investments, including increasing subscribers to its gaming and entertainment services.

In its finance arm, Sony reported a one-time loss of ¥ 16.8 billion (approximately Rs 1,140 crore) from an unauthorized transfer of funds to its Bermuda subsidiary, SA Reinsurance, in May.

The company said it reported the payment to local authorities and is trying to get the money back.

© Thomson Reuters 2021

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