Sony reports 7% drop in annual profit as PlayStation 5 sales miss trimmed target

Sony announced a 7% dip in yearly profits for fiscal year 2023, attributed to a decline in its financial services segment.

The company also narrowly missed its full-year unit sales projection for the PlayStation 5 game console.

Here’s how Sony performed in the March quarter compared the LSEG consensus estimates:

Revenue: 3.5 trillion yen ($22.4 billion), compared to 2.89 trillion yen projected. According to LSEG data, this marks a 14% gain year on year, but it is the first dip since Sony’s September quarter of 2020.
Operating profit: 229.4 billion yen, compared to 236.81 billion yen projected. This represents a 57% increase year over year.
The Japanese gaming company recorded 13 trillion in sales for 2023, a 19% increase over the previous year.

However, Sony’s operational profit for the full year was 1.2 trillion yen, a 7% decrease from the previous year.

Sony almost missed its revised downward target for PlayStation 5 sales. The company reported that sales of its flagship console reached 20.8 million in fiscal year 2023.

This is slightly below than Sony’s revised 21 million unit projection announced in February. Prior to that, the business predicted that the PS5 console would sell 25 million copies for the entire year.

Sony forecasts significantly lower PS5 sales of 18 million systems in the fiscal year ending March 2025, according to Reuters.

It follows Sony’s announcement on Monday of a management shakeup in its Sony Interactive Entertainment (SIE) gaming division, with interim CEO Hiroki Totoki taking over as chairman.

Hideaki Nishino and Hermen Hulst, longtime Sony executives, have been appointed CEOs of the Platform Business Group and Studio Business Group, respectively, two newly formed SIE divisions.

Financial unit affects earnings.
Sony stated that its financial services division was the key driver of profit decline.

The financial services unit’s operating income in 2023 was 173.6 billion yen, a 22.5% decrease from the previous year following a strong growth in 2022.

The corporation also experienced a drop in its image and sensing solutions (I&SS) division, which houses its imaging chips.

Sony’s I&SS division reported an operating income of 193.5 billion yen, a 9% decrease from 2022.

Sony said it expects a reduction in overall group revenue for the current fiscal year. The company estimates sales of 12.3 trillion yen for the fiscal year ending March 2025, a 5% decrease.

Operating income for fiscal year 2024 is estimated to be 1.28 trillion yen, up 5%, according to Sony’s consolidated data.