Sony logs record annual sales as net profit beats forecast

TOKYO, Japan — Sony reported record annual sales of 11.5 trillion yen on Friday, attributing the "significant increase" to a weak yen and growth in its entertainment and image-sensor sectors.

The revenue figure was the largest ever for the Japanese conglomerate, beating the last financial year's record of 9.9 trillion yen ($73 billion).

A weaker yen, which inflates profits for companies like Sony that sell products abroad, helped boost total sales.

Increased income from gaming hardware was also a positive factor, Sony said, along with "higher revenues for anime streaming services", including from the acquisition of Japanese cartoon giant Crunchyroll.

Annual net profit in the year to March was 937.1 billion yen -- up 6.2 percent year on year and beating a forecast of 870 billion.

But for the current financial year, which began in April, Sony predicted a lower net profit of 840 billion yen, partly for technical reasons related to tax expenses.

It expects to maintain annual sales at 11.5 trillion yen.

Hideki Yasuda of Toyo Securities said the first half of 2023-24 "will likely be a tough one for Sony".

Global shipping of computing equipment "declined in the January-March quarter due to... the slowing down of economies", he told AFP ahead of the earnings report.

The impact of such trends is likely to emerge later for the consumer goods company, Yasuda added.

Miley Cyrus boost

Sony sold 19.1 million PlayStation 5 consoles in 2022-23, up from 11.5 million the previous year when it faced supply chain issues, in part due to Covid lockdowns in China.

Now "distribution inventories have been normalised, enabling almost worldwide delivery without customer delays", company president Hiroki Totoki told reporters on Friday.

"We will continue to accelerate PS5 penetration and aim to sell 25 million units in the current financial year," said Totoki, who took the top job this month while keeping his previous role of chief financial officer.

Sony has been locked in a battle for gaming dominance with rival Microsoft, which was trying to get a $69 billion acquisition of blockbuster "Call of Duty" maker Activision Blizzard past regulators.

But this week, Britain's Competition and Markets Authority blocked the takeover, arguing it would harm competition in cloud gaming.

The ruling will be appealed by both US companies, but analysts have warned it could be game over for the gigantic acquisition.

Sony noted an increase in sales of first-party gaming titles in 2022-23, and said sales of image sensors used in smartphone cameras benefited "from an improvement in the product mix, partially offset by a decrease in unit sales".

Totoki also hailed US singer Miley Cyrus's January release of the single "Flowers", which he called "a huge hit on Spotify with a record number of streams in a single cycle".

Cyrus belongs to the Columbia Records label, which is owned by Sony.

The booming popularity of Japanese anime has also been a money-spinner for Sony, which bought streaming service Crunchyroll in 2020 for $1.17 billion.

"Animation is growing into global entertainment, with foreign countries accounting for 48 percent of the global Japanese animation market of 2.7 trillion yen in 2021," Totoki said.