Pandemic-led lockdowns push Sony’s operating profits to record high in June quarter

sony playstationIn May, Sony had announced it expected PlaySation 5 sales to be around 14.8 million units this fiscal. (Photo credit: Reuters)

Japanese tech giant Sony’s operating profit beat estimates to rise to 280.1 billion yen (approx. Rs 18,970 crore) in the June quarter from 221.7 billion yen (approx. Rs 15,010 crore) in the year-ago period. The record operating profit came on the back of robust demand for its PlaySation 5 gaming consoles, music, TVs, and films amid pandemic-induced lockdowns.

The strong first-quarter performance led Sony to raise its forecast. The company has revised its profit forecast to March 2022 to 980 billion yen (approx. Rs 66,360 crore) from 930 billion yen (approx. Rs 62,965 crore).

With coronavirus-led lockdowns easing across the world, the company had expected the demand for devices and content to go down. However, the fresh wave of Covid-19 infections has led to restrictions being reimposed in several parts.

However, the semiconductors shortage plaguing even the likes of Apple has made it difficult for Sony to produce enough PlayStation consoles to meet the growing demand. These constraints could also hit consumer electronic device production, Sony’s Chief Financial Officer Hiroki Totoki said.

In May, Sony had announced it expected PlaySation 5 sales to be around 14.8 million units this fiscal. However, the console, priced at $500 (approx. Rs 37,118) quickly sold out. Totoki said the company had secured enough chips to hit its production target.

According to Reuters, Sony wants to use the console to connect its traditional consumer electronics with its content business through online game downloads and subscription services. The company is also beefing up its entertainment content and distribution business, agreeing to buy AT&T’s animation business in December.

Sony is also increasing its footprint on streaming services such as Disney+ and Netflix by increasing its film offering as Covid-19 delays releases in theatres.

It has also indicated its willingness to continue expanding its content business through acquisitions, and said in May that it would spend 2 trillion yen over three years on strategic investments.

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