PS5 Sales Cross 65 Million as Sony Sees 73 Percent Jump in Q3 Profit

Sony Group Corp. nudged up its revenue outlook on strong music sales and a surprise boost from Chinese videogame hit Black Myth: Wukong to its PlayStation segment.

The Tokyo-based company said it now expects net revenue of JPY 12.71 trillion ($83.2 billion or Rs. 7,02,023 crore) in the year to March, up slightly from its previous forecast. The company stuck to its operating profit outlook, however, pointing to a slowdown in image sensor demand in North America.

Sony, which creates entertainment content but also supplies smartphone components to the likes of Apple Inc. and Xiaomi Corp., reported a bigger-than-expected 73 percent jump in operating profit in the September quarter.

Friday's earnings highlighted the power of a few hit titles to sway Sony's PlayStation business segment, now four years into the latest hardware generation. Sales of both outside games as well as in-house titles like Astro Bot bolstered earnings, coupled with better margins on hardware sales, it said. That was despite flops such as big-budget live service game Concord.

The company sold 3.8 million PlayStation 5 units in the quarter, spurring an 11 percent upward revision on its game and network services division's profit forecast.

“The game segment is making up for a decline in image sensor demand in North America, while there's room for growth in the music business,” Bloomberg Intelligence's Masahiro Wakasugi said. 

The entertainment group this week launched PlayStation 5 Pro, a high-priced, high-performance version of the company's flagship game console aimed at preventing defections to rival platforms during the year-end shopping season. Next year, Sony awaits blockbuster titles including Capcom Co.'s Monster Hunter Wilds and Rockstar Games Inc.'s Grand Theft Auto VI. 

As one of the world's biggest music companies, Sony is also benefiting from the popularity of streaming services like Spotify. Spotify Technology SA's US-traded shares have more than doubled this year on optimism for sustained growth. Sony's music group also houses some of its smartphone games and anime publishing, with both seeing a surge in popularity outside Japan.

The company's movie business has yet to recover fully from the Hollywood strikes by actors and writers last year, while falling ad revenue in India is also weighing on the business, executives said.

© 2024 Bloomberg L.P.

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