Sony profits jump as games offset TV production delays

(Corrects headline, paragraphs 1 and 10 to note that delayed release of TV shows, not movies, hurt profits; corrects operating profit figures and comparisons in paragraph 10)

Author: Mariko Katsumura and Sam Nassi

TOKYO (Reuters) – Sony said on Friday its operating profit rose 73% in the July-September quarter, with strong sales in its games and online businesses helping offset weakness in television programming.

Sony, whose businesses also include music and chips, maintained its profit forecast for the full year through March at 1.31 trillion yen ($8.51 billion), basically in line with the 1.34 trillion yen forecast by 24 analysts polled by LSEG.

Thanks to strong sales of image sensors, Sony’s second-quarter operating profit soared to 455.1 billion yen from 263 billion yen in the same period last year.

In addition to the growth in third-party software sales, Sony President Hiroki Totoki also highlighted the improvement in profitability of its gaming hardware business.

“We continue to see a smooth shift from PS4 to PS5, which has also led to higher software sales,” Totoki said in the earnings briefing.

Sony gets more than a third of its revenue from its games and network services divisions, and profits nearly tripled to 138.8 billion yen in the quarter. Sony released an upgraded version of its flagship game console on November 7 with better graphics.

It raised its gaming division’s annual profit forecast from 320 billion yen to 355 billion yen, causing the group’s annual revenue forecast to be slightly revised up to 12.71 trillion yen.

Although Sony’s PlayStation 5 sales fell 22% from the second quarter of 2023 to 3.8 million units, it still maintains its sales forecast of 18 million units for this fiscal year.

The industry is grappling with rising game production costs, and Sony said last month it would shut down two PlayStation developers, including Firework Studios, the developer of “Concord” which launched the game in August.

The Sony Pictures unit posted a profit of 18.5 billion yen in the quarter, down from 29.4 billion yen in the same period last year, partly due to delays in the release of TV series following the 2023 Hollywood strike.

(Reporting by Mariko Katsumura and Sam Nussey; Editing by Himani Sarkar, Muralikumar Anantharaman and Alexander Smith)