Japan’s Sony annual profits hit record highs for second year

Pedestrians are reflected in a logo of Sony Corp outside its showroom in Tokyo July 16, 2014. — Reuters pic
Pedestrians are reflected in a logo of Sony Corp outside its showroom in Tokyo July 16, 2014. — Reuters pic

TOKYO, April 26 — Japan’s Sony said today its annual profits had climbed to record highs for the second consecutive year thanks to a robust performance of its games and other entertainment business.

The electronics giant reported net profit soaring 86.7 per cent year-on-year to ¥916.3 billion (RM34 billion) in the year ended in March while operating profit rose 21.7 per cent to ¥894.2 billion.

Sales edged up 1.4 per cent to ¥8.7 trillion.

The growth was driven by higher profits in games and network businesses, including an online service that allows users to enjoy music and video titles via their PlayStation accounts.

EMI Music Publishing also contributed to pushing profits up.

For the current fiscal year to March 2020, however, Sony said it was bracing for lower profits in the absence of one-time benefits such as gains from making EMI Music a fully owned subsidiary.

It forecast net profit to drop 45 per cent to 500 billion yen with operating profit sagging nine percent to ¥810 billion.

Sales however were forecast to grow 1.5 per cent to ¥8.8 trillion. 

“Sony had achieved a V-shape recovery until the last fiscal year but its growth is expected to slow down in the current fiscal year,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo.

“PS4, which spearheaded Sony's revival, is now peaking out while its mobile phone businesses are expected to continue squeezing profits,” he told AFP.

Sony continued to struggle in the mobile business with its operating loss more than tripling to ¥97 billion because of reduced smartphone sales.

Profits also fell in Sony’s semiconductor and financial services businesses.

But it enjoyed strong growth in its games and network businesses, including an online service that allows users to enjoy music and video titles via their PlayStation accounts.

Operating profit in that sector soared 75 per cent to ¥311 billion.

Revenue from PlayStation4 consoles fell but software sales and network services logged robust rises.

Sony said it expects revenue from this core sector will sag due to a continued fall in game hardware sales, costs to develop the next-generation console, and unfavourable foreign exchange rates.

Yasuo Imanaka, an analyst at Rakuten Securities in Tokyo, said Sony’s game business also faces a threat from new entrants in the sector.

“Google's Stadia can be a powerful rival. Sony is expected to launch PS5 in the near future but may have to review its game business strategy due to the emergence of Stadia,” he said.

The Stadia platform will let gamers stream blockbuster titles to any device they wish. — AFP

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