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

Sony on Tuesday reported a 7% drop in annual profits in the fiscal year 2023, dragged down by a decline in its financial services division.

The company also narrowly missed its forecast for unit sales of its flagship PlayStation 5 gaming console for the full year.

Here’s how Sony did in the March quarter versus LSEG consensus estimates:

• Revenue: 3.5 trillion yen ($22.4 billion) versus 2.89 trillion yen expected. That represents a 14% increase year-over-year — but the first drop since Sony’s 2020 September quarter, according to LSEG data.
• Operating profit: 229.4 billion yen versus 236.81 billion yen expected. That marks a 57% jump year-over-year.

The Japanese gaming giant reported 2023 revenue of 13 trillion, an increase of 19% year-over-year.

Sony’s operating profit for the full year, though, came in at 1.2 trillion yen, down 7% year-over-year.

Sony narrowly missed its revised down target for PlayStation 5 sales. The firm said that sales of its flagship console totalled 20.8 million in the fiscal year 2023.

That’s slightly lower than the revised 21 million unit target that Sony gave investors in February. Prior to that, the company had forecast that its PS5 console would sell 25 million units for the full year.

Sony expects even weaker sales of 18 million units of its PS5 in the year ending March 2025, a company executive said, according to Reuters.

It comes after Sony on Monday announced a management shakeup in its Sony Interactive Entertainment (SIE) gaming unit, with the division’s interim CEO Hiroki Totoki becoming chairman of the business.

Long-time Sony executives Hideaki Nishino and Hermen Hulst were appointed CEO of the Platform Business Group and Studio Business Group, respectively — two newly created divisions of SIE.

Sony said its financial services business was the primary segment driving down profit.

In 2023, operating income in the financial services unit came in at 173.6 billion yen, marking a 22.5% year-on-year drop after a firm increase in 2022.

The company also suffered from a decline in its imaging and sensing solutions (I&SS) business, which houses its imaging chips.

Sony’s I&SS business recorded operating income of 193.5 billion yen, down 9% from 2022.

Sony said it’s forecasting a drop in overall group revenue for the current fiscal year. The company expects sales will reach 12.3 trillion yen for the year ending March 2025, down 5%.

Fiscal year 2024 operating income is expected to total 1.28 trillion yen, up 5%, Sony said in its consolidated results.