Sony Raises Profit Forecast After a Better-Than-Expected Performance

Sony has raised its profit forecast for this year. The Japanese tech company expects strong results in the games sector, partly because the yen exchange rate will drive profits from foreign sales.

Sony reports this by publishing quarterly figures showing that the company is doing good business.

Net profit between April and December increased by 5 percent to 809 billion yen, converted to about 5.7 billion euros. Those gains were mainly driven by solid games, music and electronics sales in the third quarter, which Sony says is a critical period when people make holiday purchases.

For the broken fiscal year 2022-2023, Sony now expects a net profit of 870 billion yen, up from an earlier estimate of 840 billion yen. The operating profit of the gaming division is “expected to be higher than the November forecast, mainly due to the positive impact of currency exchange rates,” Sony reports.

The value of the Japanese currency has moved closer to the dollar in recent months but has not yet returned to last year’s levels. For example, 1 dollar is currently worth about 128 yen, compared to 114 yen last year.

Among other things, the trade-in Sony’s game console, the PlayStation 5, picked up in the last months of the year. In total, 12.8 million consoles were sold in nine months, 7.1 million from October to December. Previously, problems in the supply chain led to production delays. For example, the game console has been on the market for a few years, but about 11.5 million fifth-generation PlayStations were sold in the previous financial year.

In addition to the expected favourable exchange rate, Sony expects several new games for the PlayStation 5 to do well, including the “long-awaited game” Final Fantasy XVI. The release of the predecessor Final Fantasy XV was several years ago.

Earlier this week, the Bloomberg news agency reported, based on insiders, that the production target for the latest virtual reality headset for the PlayStation 5 will be significantly lowered. According to the sources, this would be due to disappointing pre-sale orders. Analysts think that the high price is slowing down interest in the headset, also because the glasses only work on the PlayStation 5 and not on other consoles.

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