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Sony's Annual Profit Drops 7% as PlayStation 5 Sales Miss Target

Sony a 7% decline in annual profits for the fiscal year 2023, with decrease of a downturn in financial services division
May 15, 2024

Sony's latest financial report for the fiscal year 2023 reveals a 7% dip in annual profits, largely attributed to a decline in its financial services division. Alongside this, the tech giant narrowly missed its projected unit sales for its flagship PlayStation 5 gaming console for the year.

In the March quarter, Sony exceeded LSEG consensus estimates, reporting revenue of 3.5 trillion yen ($22.4 billion) compared to the expected 2.89 trillion yen. This marks a 14% increase year-over-year. However, it's worth noting that this is the first drop since Sony's September 2020 quarter, according to LSEG data. Operating profit for the quarter stood at 229.4 billion yen, slightly below the expected 236.81 billion yen, marking a 57% jump year-over-year.

For the fiscal year 2023, Sony reported revenue of 13 trillion yen, a 19% increase from the previous year. However, its operating profit for the full year totaled 1.2 trillion yen, down 7% year-over-year. 

Despite robust sales, Sony narrowly missed its revised target for PlayStation 5 sales, with the console totaling 20.8 million units sold in the fiscal year 2023, just below the revised target of 21 million units announced in February. Originally, Sony had forecasted sales of 25 million units for the year.

Looking ahead, Sony anticipates even weaker sales, predicting 18 million units of the PS5 to be sold by March 2025.

In response to these results, Sony announced a management shakeup in its Sony Interactive Entertainment (SIE) gaming unit. Hiroki Totoki, the division's interim CEO, will now serve as chairman of the business. Additionally, long-time Sony executives Hideaki Nishino and Hermen Hulst have been appointed CEOs of the newly created Platform Business Group and Studio Business Group, respectively.

The decline in profit was primarily driven by Sony's financial services business, which saw operating income drop by 22.5% year-on-year, reaching 173.6 billion yen in 2023. Similarly, the imaging and sensing solutions (I&SS) business, which includes Sony's imaging chips, experienced a 9% decline in operating income, totaling 193.5 billion yen.

Looking forward, Sony forecasts a 5% drop in overall group revenue for the current fiscal year, expecting sales to reach 12.3 trillion yen by March 2025. However, fiscal year 2024 operating income is projected to increase by 5%, reaching 1.28 trillion yen, according to Sony's consolidated results.

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