Sony Hikes Net Profit Forecast, Will List Financial Services Unit
Faizan Hashmi Published February 14, 2024 | 12:10 PM
Tokyo, (APP - UrduPoint / Pakistan Point News - 14th Feb, 2024) Japan's Sony upgraded its annual net profit forecast on Wednesday and said it would list its financial services division on the stock market next year.
The conglomerate now predicts full-year net profit of 920 billion Yen ($6.1 billion) instead of its previous target of 880 billion yen.
One reason for the more ambitious outlook is financial services revenue, including net gains on investments at Sony's life insurance business, the company said.
Sony also announced it would spin off its financial services division and take it public in October 2025.
For the three months to December, the entertainment and electronics behemoth saw "significant increases" in sales in its financial services, game and network, sensors, music and pictures segments.
It also enjoyed reduced tax expenses related to the dissolution of a subsidiary.
In the October-December period, sales jumped 22 percent to 3.7 trillion yen for a net profit of 363.9 billion.
The weaker yen has boosted income in the key music and gaming sectors, although Sony said it expected to see a decrease in sales of gaming hardware as it shifts fewer consoles.
In December, sales of Sony's flagship PlayStation 5 console crossed 50 million units.
But despite improvements in supply chain snarl-ups that made it hard to buy a PS5 after its launch in 2020, some analysts warn that the console risks losing momentum, especially in the battle for dominance with US rival Microsoft.
microsoft has made a strong push in recent years to boost its position, including the $69 billion takeover of Activision Blizzard, the maker of the blockbuster "Call of Duty" games.
Sony had previously tried to block the Activision deal, but agreed with Microsoft in July to keep releasing "Call of Duty" on the PlayStation.
Sony's video game segment scored a hit with "Marvel's Spider-Man 2", released in October last year on the PS5.
The title, developed by Sony-owned Insomniac Games, became the fastest-selling PlayStation Studios game in the first 24 hours after release.
Even so, "despite the shot in the arm from its Spider-Man 2 title hit, which has come and gone", Sony needs to watch its back when Microsoft "launches Activision games, namely Call Of Duty (COD) franchises on its subscription Game Pass offering", noted Amir Anvarzadeh from Asymmetric Advisors.
Music industry publication Billboard last week said Sony had signed a deal worth at least $600 million to buy half of Michael Jackson's "publishing and recorded masters catalog".
Sony declined to comment on the reported deal, which Billboard said could be the largest-ever valuation of a musician's music assets.
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