Sony Sells 2.4 Million PS5 Units in First Quarter, First-Party Games Lift PlayStation Business

Sony Group raised its forecast for revenue and profit in the fiscal year to March after a successful quarter for its music and gaming software divisions. The Japanese entertainment giant said its operating profit during the three months ended June was JPY 279.1 billion ($1.9 billion or roughly Rs. 15,949 crore), beating the consensus estimate of JPY 273.9 billion (roughly Rs.15,736 crore) and the year-earlier profit of JPY 253 billion (roughly Rs. 14,535 crore). Sales for the fiscal year are now expected to come in at JPY 12.6 trillion (roughly Rs. 7,23,995 crore), with JPY 1.3 trillion (roughly Rs. 74,697 crore) in operating profit, both slightly raised.

The key PlayStation division saw a lift from the popularity of first-party and online multiplayer games, such as Helldivers 2, though its biggest boost came from favorable exchange rates, Sony said in its report on Wednesday. The company sold 2.4 million units of the aging PlayStation 5 console, significantly below the three million that analysts had expected.

“The PlayStation business is not as good as the numbers suggest, because its profits and revenue were inflated by the weak yen,” Morningstar Investment director Kazunori Ito said. “Sony had said hardware sales would slow down from this fiscal year, but it seems that pace is a lot faster than what we had anticipated.”

Its music business segment contributed the largest share of profit in the quarter, thanks to its catalog of best-selling artists and the growing overseas popularity of made-in-Japan anime, which is also housed under the music group. The company saw higher revenue from merchandising and live events, as well as higher income from streaming services like Spotify. It revised its sales forecast for both gaming and music up by three percent. 

“The music segment has become an ideal cash-cow unit that other companies would be envious of,” said Toyo Securities analyst Hideki Yasuda. “The segment should continue to expand for the foreseeable future.”

Production yields of Sony's image sensors have improved and the company said it saw an increase in unit sales during the period. The global smartphone market accelerated its return to growth in the June quarter, with shipments rising six percent, market watcher IDC reported in July. Sony customers Xiaomi Corp. and Vivo were the leaders in expanding their units shipped.

But analysts warn that the Tokyo-based company may face a new set of challenges if the yen resumes its advance. The firm makes much of its revenue overseas, including sales of consoles and image sensors as well as entertainment licensing, and the yen's prolonged weakness in recent years has helped bolster its bottom line.

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