Sony Group believes it can sell 18 million PlayStation 5 consoles this business year, as long as there are no new China lockdowns that make component sourcing difficult.
Strong game sales helped Sony more than double its fourth-quarter operating profit as it uses the popular consoles to encourage online game downloads and sign-ups for subscription services.
Last business year it sold 11.5 million units as it struggled like other consumer electronic companies with Covid-19 supply chain disruptions.
“What I can say now is that we can procure enough components for 18 million units,” Hiroki Totoki, Sony’s chief financial officer, said at a press briefing.
In a shift away from traditional hardware such as TVs, the company is also expanding its software business, announcing in February the acquisition of Bungie, the creator of the “Halo” videogame for $3.6 billion.
Profit Lower Than Estimated
Sony’s profit for the three months to March 31 rose to 138.6 billion yen ($1.06 billion) from 66.5 billion yen a year earlier. It was, however, lower than an average 147 billion yen profit estimate from 10 analysts surveyed by Refinitiv.
Earnings at its gaming and network services business almost tripled in the quarter to 55.6 billion yen. This business year Sony expects profits from the unit to fall 12% as it invests in game development and spends on acquisitions.
For the full year that ended March 31, earnings were also boosted by movie unit profits from the success of the “Spider-Man: No Way Home” movie.
This business year, the Japanese company forecast operating profit to fall to 1.16 trillion yen from 1.2 trillion yen. That prediction is lower than a mean 1.21 trillion yen profit based on forecasts from 23 analysts, Refinitiv data showed.
Sony on Tuesday also announced that it will buy up to 200 billion of its own shares over the next 12 months to avoid dilution of its shares from stock option compensation plans.
Meanwhile, the tight China lockdowns have taken a toll on the country’s economy, with export growth slowing to its weakest in almost two years and factory activity contracting at a steeper pace in April.
- Reuters, with additional editing by George Russell