Wednesday 4th August 2021
Group raises forecast
Sony’s electronics are in demand again
From the brake to the engine: TVs, cameras and audio and video equipment from Sony are in demand again. Customers like to buy more expensive products. The games division is also buzzing, but is slowed down by the lack of chips. And of corona easing.
The long ailing electronics business has recently become a growth engine for Sony. With a solid increase in sales, the division made the greatest contribution to the Japanese group being able to close the spring with significant growth. The Playstation console game business, which has grown strongly in the past year, is running at full speed and is reaching the limits of its growth. In addition, the semiconductor bottlenecks are slowing sales of the new Playstation 5, which is difficult to get even more than six months after the market launch.
Overall, Sony increased sales in the first fiscal quarter, which ended at the end of June, by 15 percent to the equivalent of almost 17.4 billion euros (2.26 trillion yen). At a good 1.6 billion euros, the profit was nine percent higher than in the same quarter of the previous year, as Sony announced.
The games division remained the largest division with a turnover of 4.75 billion euros. But it was only two percent more than in the same quarter of the previous year. And the operating result shrank by almost a third. On the one hand, the development is due to the exceptionally good figures of the previous year. In view of the corona restrictions, video games had become much more popular in the past year – now they have to compete with other leisure activities for people’s time again. In addition, the ongoing semiconductor shortage is slowing sales of the new Playstation 5.
At the same time, Sony pointed out that the group initially makes a loss with every Playstation 5 sold, because the price is below the production costs. Part of the industry’s business model is to accept losses when selling the devices and then to get the money in later through the games.
Thanks to the Playstation, Sony had achieved a record profit of more than one trillion yen for the first time in the financial year that ended at the end of March. For the current fiscal year, Sony has already forecast a decline in profits, but has now raised the forecast from 660 billion to 700 billion yen. The main reason for this was the electronics business, whose sales moved back within reach of the games division. More – and also more expensive – televisions, cameras and audio and video equipment have been sold, said Sony.
Sony’s music and TV productions business continued to grow thanks to streaming revenues. At the same time, growth will be slowed by delays in theatrical releases, the group restricted.
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