Sony Corporation faced a 29 per cent dip in operating profit during the July-September quarter, reporting 263 billion yen ($1.74 billion), Reuters reported on Tuesday.
The downturn was attributed to weaker performances in its image sensor and financial divisions, with the chips division specifically noting a 37 per cent decline in profit due to elevated expenses and decreased sales of image sensors, commonly used in smartphones.
In response, Sony President Hiroki Totoki told Reuters, “The North American market shows a significant year-on-year decline, and at this point, there’s no change to our view that a recovery in the market will take place from next fiscal year.”
Despite these setbacks, Sony maintained its sales target of 25 million PlayStation 5 (PS5) consoles for the current financial year, expressing confidence in a boost from the upcoming release of a slimmer version of the device.
Totoki admitted, “It’s not something we can attain very easily.” The conglomerate had sold 4.9 million PS5 units in the second quarter, totalling 8.2 million units for the fiscal year.
In an unexpected development, Jim Ryan, the gaming chief at Sony, announced his departure in March, coinciding with developer Bungie cutting staff amidst widespread industry layoffs.
The release of “Marvel’s Spider-Man 2” on October 20 provided some optimism for Sony, with five million units of the game sold by the end of the month. However, rival Nintendo continues to dominate the gaming scene, achieving success despite not pursuing the cutting-edge graphics pursued by Sony and Xbox maker Microsoft.
Despite the challenges in the gaming sector, Sony’s movie division unveiled plans to co-finance and distribute a live-action adaptation of Nintendo’s iconic “Zelda” franchise. Analysts are speculating on the potential for further collaboration between the two Japanese entertainment giants, citing Sony’s strong distribution network and publishing track record as strategic assets for Nintendo.
Sony shares closed down 0.8 per cent on Thursday ahead of the earnings report, marking a 32 per cent increase for the year. The company maintained its full-year operating profit view at 1.17 trillion yen but raised its sales and net income forecasts by 2 per cent each.
(With inputs from Reuters)