Japan’s Sony Group Corp on Thursday squeezed out a surprise one percent rise in operating profit for its second quarter though costs from growing sales of its PlayStation 5 (PS5) console pressed on margins.
Weaker profitability in the key games segment could also not stop the group hiking its full-year operating forecast by 6 percent to 1 trillion yen ($8.81 billion) from its August forecast, driven by expected profit growth in movies, music and electronics, Reuters reported from Tokyo.
Sony said it has sold a cumulative 13.4 million units of PS5 since launch last November. That contributed to a 27 percent year-on-year jump in sales at its gaming unit, though profit was less robust as the conglomerate sold hardware below cost.
Manufacturers frequently sell new consoles at a loss as they build an install base for software sales, with component shortages providing extra pain for makers of the latest generation of devices.
Chief Financial Officer Hiroki Totoki said Sony is on track to sell 14.8 million PS5 consoles this financial year – a target that takes into account the global shortages. Sales of first-party titles fell, though sales from other developers grew.
Sony also said it is considering partnering Taiwan Semiconductor Manufacturing Co Ltd in its plans to build a chip plant in Japan without confirming further details, amid a corporate scramble to secure long-term stable semiconductor supply.
Sony reported group profit of 318.5 billion yen for July-September, beating the 222 billion yen average of six analyst estimates compiled by Refinitiv.
In a blow to Sony’s pop culture credentials, South Korea’s top cultural export, boy band BTS, said last week it has dropped its Columbia Records label for a deal with Universal Music Group NV.
Other challenges include an investor attempt to oust the management of India’s Zee Entertainment Enterprises Ltd, casting a shadow over merger talks with Sony’s local unit.