Strong digital camera sales have helped Sony cut its decline in profits to 32 per cent as TVs and audio struggle and the PS5 fails to meet sales expectations.
Overnight Sony revealed a net profit forecast of $366 million off the back of strong sales in digital cameras, there was no mention of how poorly their TV and audio sales were with insiders claiming that the business is still “haemorrhaging” losses across both their consumer TV’s and audio businesses.
Sony Chief Financial Officer Hiroki Totoki said that the company’s key product, the PlayStation 5, was no longer selling at a loss.
The PS5 Digital Edition is on track to have its loss offset by other hardware sales including peripherals and the PlayStation 4, the CFO added.
the Japanese electronics giant benefitted from a boost from consumers who have spent more time hunkered down at home during the pandemic.
For the first quarter ended June 20, Sony said profit surged 26 percent to US$2.57 billion, besting analysts’ estimates of $1.90 billion. Revenue rose 15 percent to $20.62 billion.
The company raised its profit forecast for the year through March 2022 to $8.94 billion from $8.49 billion as the firm continued to see increase demand for PS5 gaming consoles.
Last week, Sony said that the gaming console sold more than 10 million units since it launched last November, outstripping sales of its predecessor PS4, even as the firm grapples with a global chip shortage.
Chief Financial Officer Hiroki Totoki said during an online press conference on Wednesday that “with the shift toward high-grade products, digital camera sales were strong in every region.”
Sony Australia has not said whether sales locally rose in the last quarter.
What was revealed was those sales of still and video cameras soared to 116 billion yen, more than doubling from a year ago as people emerged from their COVID hibernation.
In addition to strong sales, a favourable foreign exchange rate also supported the business.
Sony has focused on producing mirrorless digital cameras at a higher price range, restructuring its business so it can make products appealing to professionals a move aimed at taking share away from both Nikon and Canon.
Its Alpha 1 model, which can make 8K video recordings, has been a success the Company claims.
Sony has also been able to leverage its image sensor technology to develop high-quality electronics.
ChannelNews understands that the Australian operation has also benefitted from strong sales of their premium projectors and top end TV’s that are sold via Melbourne based Audio Active.
Sony’s entertainment businesses also benefitted from stay-at-home consumers with strong demand for both music and movies.
The business also witnessed an increase in sales related to its anime business, especially the popular Demon Slayer franchise.
The hit anime was turned into a movie last year and has racked up billions in ticket sales.
Meanwhile, sales in its breadwinner gaming business fell short of analysts’ expectations during the April-June period as Sony struggled from a slowdown in COVID-driven demand and lower software sales, as well as add-on content.
Sony aims to sell over 14.8 million units of its PlayStation 5 console in fiscal 2021.
Although the company logged 2.3 million units in hardware sales for its next-generation PlayStation 5 console, marketing and other related costs weighed down on profit.
Back in May, Sony Interactive Entertainment President and CEO Jim Ryan revealed that PS5 would become profitable soon and that production of the standard hardware version was expected to break even in June.
From its release in November to the end of June, Sony has sold a total of 17.9 million PS5 units. The company aims to sell over 14.8 million units in fiscal 2021.
Totoki noted that the global chip shortage has “affected the company in many ways.” But he added that the company has taken necessary measures to mitigate the impact and has secured enough chips to produce its goal of 14.8 million PS5 units this year.
In recent years, Sony has been able to grow its gaming business with the introduction and improvement of subscription-based services as it seeks to rely less on physical hardware and software sales. Since the pandemic, subscribers of PlayStation Plus, which pulls in monthly subscription revenue for its online multiplayer games, have remained above 45 million.
Totoki said: “Our user base has been expanding steadily,” and that the company’s gaming business is on course to grow in the long term.
For the April-June period, Sony reported a 9% rise in its overall net profit to 212 billion yen and a 26% increase in operating profit to 280 billion yen. Revenue jumped 15% to 2.2 trillion yen.
Aside from the chip shortage, Sony also noted that a resurgence in COVID-19 infections in certain countries, including those in Australia & Southeast Asia, remain a concern for the company, as it would limit the movement of people and possibly hinder its electronics sales.