Sony raised its full-year profit forecast amid everyone at home playing COVID season games

Sony said it expects full-year net profit to increase 37% after the second quarter of 2020 strong growth, compared to forecasts for a slight decline, as consumer demand during the outbreak has helped boosting gaming revenue.

On Wednesday, the Japanese electronics giant said its net profit could reach 800 billion yen ($ 7.6 billion) in the fiscal year to March 2021 thanks to revenue. increased 3% to 8.5 trillion yen. Previously, Sony used to forecast revenue will drop only 0.5% to 8.3 trillion yen and net profit will fall 12% to 510 billion yen.

This change mainly stems from start-up businesses, especially in the gaming segment, in the first half of 2020, thereby helping to compensate for the slowdown in the image sensor segment, which is an important area. key importance to the company.

Gaming is one of the rare businesses that have benefited from the COVID-19 pandemic, as more and more people choose to play games at home instead of going out.

Sony’s subscription-based gaming services have exceptionally good growth. The PlayStation Plus plan, which gives users access to online multiplayer titles after paying a monthly fee, reached 45.9 million users as of last September, a 24% increase from the same period last year. Sony also expects software sales, including popular titles like “Ghost of Tsushima”, to continue to grow thanks to demand generated during the pandemic.

The company is also gearing up to launch its next-generation console, the PlayStation 5, on November 12. While the company has warned that marketing and related expenses will make the PS5 more likely to be unprofitable this fiscal year, Sony has expressed hope that it will be well received by gamer.

” We aim to sell more than 7.6 million units by the end of this fiscal year and surpass the number of PS4s sold in its first year, ” said Sony CFO Hiroki Totoki at the event. discussion of the company on Wednesday.

In addition, the tax reduction and the increase in stock prices also contribute to the increase of Sony’s full-year financial forecast.

Meanwhile, sales of Sony’s high-end image sensor segment continue to struggle as the smartphone market slows amid the social blockade and economic crisis in many countries. Sony is the world’s leading manufacturer of image sensors, with a global market share of 50% last year. However, the company still cuts its financial forecast for this business and expects operating profit to drop 65% this year, to 81 billion yen.

The US’s dismantling of Huawei Technologies, one of the world’s top smartphone makers from China, also affected Sony. The Chinese smartphone maker is estimated to account for about a fifth of Sony’s image sensor sales, making it the second-largest customer after Apple.

Although Sony is famous for developing high-quality, expensive sensors, Sony’s CFO Totoki says that in order to meet the current market demand, the company will “focus on expanding its sensor market share. The image is aimed at mass products this year ”

Besides the sensor segment, Sony said that profits from the film and electronics segment are also expected to decline this year. The corona virus has stalled production, and many US theaters are still closed. Meanwhile, Sony forecasts a drop in digital camera sales, as well as products serving the broadcast and other professional sectors.

During April to September, Sony’s net profit increased 103% to 692 billion yen, while revenue increased 0.9% to 4 trillion yen. Game sales rose 22% to 1.1 trillion yen in six months, a trend Totoki forecasts will continue.

” We believe that this momentum, thanks to demand from home gamers, will continue to be strong in the future ” – CFO Sony said.

Reference: NikkeiAsia