Sony Group Corp. raised its revenue forecast thanks to strong music sales and a surprise boost from a Chinese video game hit Black Myth: Ukun to its PlayStation segment.
The Tokyo-based company said it now expects net income of ¥12.71 trillion ($83.2 billion or ₹7,02,023 crore) in the year to March, slightly ahead of its previous forecast. However, the company stuck to its operating profit forecast, pointing to slowing demand for the image sensor in North America.
Sony, which creates entertainment content and also supplies smartphone components to companies such as Apple Inc. and Xiaomi Corp., reported a bigger-than-expected 73% jump in operating profit in the September quarter.
Friday’s earnings underscored the strength of several hit games that weighed on Sony’s PlayStation business, which has been working on its latest-generation hardware for four years. Sale of both third-party games and own titles Astrobot Increased earnings combined with better margins on hardware sales, the report said. This was despite setbacks such as a big-budget live-action game Concord.
The company sold 3.8 million PlayStation 5 units in the quarter, prompting an 11 percent revision to its gaming and networking division’s profit forecast.
“The gaming segment is offsetting the decline in demand for image sensors in North America, while there is room for growth in the music business,” said Masahiro Wakasugi of Bloomberg Intelligence.
The entertainment group this week launched the PlayStation 5 Pro, a pricey, high-performance version of the company’s flagship game console, aimed at fending off a switch to rival platforms during the year-end shopping season. Sony is expecting blockbusters next year, including Capcom Co Monster Hunter Wilds and Rockstar Games Inc Grand Theft Auto VI.
As one of the world’s biggest music companies, Sony also benefits from the popularity of streaming services such as Spotify. Spotify Technology SA’s US-traded shares have more than doubled this year on optimism about sustainable growth. Sony Music Group also hosts some of its smartphone games and publishes anime, both of which are seeing a surge in popularity outside of Japan.
The company’s film business has yet to fully recover from last year’s Hollywood strikes by actors and writers, and falling advertising revenue in India is also weighing on the business, executives say.
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