Sony Group Corp of Japan cut its full-year profit prediction on Friday due to a weaker-than-expected performance at its major gaming sector, which reported a significant decline in first-quarter operating profit as customer interest in gaming dropped.
Sony’s game business had a 37 per cent drop in profit from the previous year’s April to June quarter, with Chief Financial Officer Hiroki Totoki blaming a lack of high-profile titles while loosening COVID-19 regulations depressed stay-at-home demand.
The producer of PlayStation 5 consoles cut its gaming unit’s 2017 operating profit prediction by 16 percent, citing an expected drop in game sales from external developers as well as expenses from an earlier-than-planned conclusion of its partnership with “Halo” creator Bungie.
Sony has stated that it expects to sell 18 million PS5 systems this fiscal year as supply chain snarls alleviate and production ramps up. In the fiscal year ending March 31, it sold 11.5 million units.
The company sold 2.4 million PS5 units in the first quarter, a modest rise over the same period last year. “God of War Ragnarok,” due out in November, is one of the upcoming PlayStation titles that the company thinks would increase user involvement.
Sony has lowered its year operating profit expectation by 4per cent to 1.11 trillion yen ($8.37 billion). It reported a 9.6 per cent increase in first-quarter operating profit to 307 billion yen, exceeding analyst expectations, thanks to strong demand for its films and television shows.
Sony earned a record 1.2 trillion yen profit last year, thanks to strong demand for its entertainment offerings.
Sony’s stock finished flat ahead of earnings. The group’s stock has lost around a fifth of its value this year, compared to a 3 per cent decrease in the blue-chip benchmark Nikkei 225.
(Adapted from IBTimes.com)