Japan-based Sony Corp raised its profit outlook for the full-year by one-third, primarily helped by the demand for games, movies as well as other content, fueled by the pandemic. However, the company did disclose that due to a global shortage of semiconductors, they were struggling to build enough PS 5 consoles. On Wednesday, the entertainment and electronics conglomerate said that some customers may have to wait longer for getting their new consoles because it is competing with other businesses for chips, which range from car companies to smartphone makers.
Hiroki Totoki, the chief financial officer, said in a press briefing that the shortage of semiconductors and some other components was making it difficult for them to increase PS5’s production. He also said that by mid-March, the company was expecting to sell more than 7.6 million PlayStation 5 consoles. The console has a price tag of about $500 and it had been sold out quite quickly after it was launched on online retail sites in Japan and in the United States in November. This was mostly because of increased demand for videogames by people who had been stuck at home due to the lockdowns imposed for the coronavirus. The switch to this new gaming console is also expected to encourage gamers to subscription services and online downloads.
This will help the company in boosting its gaming unit’s profitability. Sony is now expecting to rake in operating profit of about 940 billion yen, which is the equivalent of $8.95 billion. This will be for the 12 months through March and will be a significant improvement to its previous forecast of about 700 billion yen. Totoki also announced that the company had resumed some of its shipments to customers in China for image sensors from late November. Sony had been quite worried after the restrictions of the US on sales of chips using the country’s technology to Huawei Technologies Co. Ltd, the Chinese smartphone maker, as this would have impacted its sensor business.
In November, plans had been announced by Huawei for selling Honor, their budget-brand smartphone maker. Last month after the spinoff, Honor announced that they had signed deals with component makers and chip suppliers, including Sony. Huawei was the second-largest image sensor customer of Sony after Apple Inc. and it accounted for about one-fifth of the total $10 billion in revenue from the sensor business. The operating profit of the company for the October-December quarter had jumped by 20% from a year ago to 359.2 billion.
This was way past the consensus estimates that had been made by analysts of about 179 billion. Historically, Sony had been better known for hardware like TVs and the Walkman music player, but in recent years, the company has heavily invested in improving its entertainment offerings while streamlining its business of consumer electronics. This year, the company is planning to close down a factory in Malaysia, which manufactures headphones, home audio equipment and some other products, another indication of the company’s shifting focus towards entertainment.
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