Japan’s Sony logged a hefty drop in first-quarter profit, hurt in part by a weaker performance from its movie division but the entertainment giant remained hopeful about prospects for a record year for its PlayStation 5 console.
Operating profit slid 31% to $1.8 billion in April-June, in line with estimates and also pulled down by lackluster results from its financial business which had benefited from a property sale in the same period a year earlier.
Profit at its movie division plunged by two-thirds due to lower sales for television content as well as higher marketing costs after the company released more films in theaters.
Sony trimmed its annual sales forecast for the unit by 3% citing the impact of strikes by Hollywood writers and actors, which have affected production of scripted television shows and films.
Once a consumer electronics giant, the conglomerate has transformed itself to focus more on entertainment, developing movies, music and games.
Sony has said it expects to sell 25 million PlayStation 5 consoles this financial year, in what would be a record for a PlayStation device, following the easing of supply chain snarls.
Sales have so far been weaker than expected but the company said promotions starting in July are helping sales momentum.
“We believe that there is ample possibility for us to catch up,” Sony President Hiroki Totoki told reporters.
Cumulative sales of the console have topped 40 million but the company lacks high-profile upcoming first-party titles.
Nintendo last week reported it has sold 18.5 million units of “The Legend of Zelda: Tears of the Kingdom” since its release in May, helping drive sales of its aging Switch console.
Sony is also a leading maker of image sensors, which are used in cameras.
The conglomerate had expected a gradual recovery in the smartphone market from the second half of the current financial year but now thinks it will not happen until 2024 at the earliest.
Sony maintained its forecast of a 10% decline in operating profit for the full year.
In May, Sony said it is examining a partial spin-off of its financial unit, which includes life insurance and banking, as it looks to invest further in its entertainment businesses.
This story originally appeared on NYPost
