Sony-Q1

Sony, the Japanese tech giant, witnessed a significant decline in first-quarter profits

Sony, the Japanese multinational corporation, faced a significant decline in first-quarter profits, attributing the downturn to underperforming segments such as its movies and financial divisions. Profit for the April-June quarter was 253 billion yen (US$1.77 billion). That compared with an average estimate of 256 billion yen from 11 analysts by Refinitiv.

Sony reported a 31% drop in operating income in the fiscal first quarter, citing decreased profits at its financial services and movies businesses. The company raised sales forecasts for the entire year, largely thanks to its PlayStation games business boost. Sony sold 3.3 million units of the PlayStation 5 in its April-June quarter, up 38% year-over-year.

Quarterly sales rose 33% to 2.96 trillion yen (US$21 billion) as sales grew in games and network services, the music business, financial services, and imaging solutions.

Sony said its results got a boost from a favorable exchange rate. The yen has been declining lately, trading at about 143 yen to the dollar, and a weak yen is a plus for Japanese exporters like Sony.

The company reported a 6% decrease in revenue and a 68% slump in profit in its pictures division. Sony blamed the disappointing performance on strikes carried out by the Writers Guild of America, or WGA, and Screen Actors Guild – American Federation of Television and Radio Artists, or SAG-AFTRA, against using artificial intelligence to generate movie scripts.

The Japanese tech giant has received plaudits for its transformation into an entertainment behemoth spanning movies, music, and games and is also a leading maker of image sensors. After the easing of supply chain snarls, Sony has said it expects to sell 25 million PlayStation 5 consoles this financial year, in what would be a record for a PlayStation device.