Sony’s operating profit increased 10% in the third quarter of FY24, above expectations, boosted by the strength of its banking, movie, and music divisions. The Japanese company, which said in 2023 that it was considering a partial spin-off of its banking operations, said it planned to float Sony Banking Group in October 2025.
Sony also stated that it will keep a stake of just under 20% in the banking sector while it focuses on developing entertainment and image sensors. Sony, best known as the inventor of the Walkman, has grown from an electronics manufacturer to an entertainment and technology behemoth with interests in movies, music, games, and chips.
Its earnings from October to December were 463.3 billion yen (S$4.15 billion), above the average forecast of 428 billion yen from 11 experts polled by the London Stock Exchange Group.
Sony said that it sold 8.2 million PlayStation 5 consoles in the third quarter, which includes the important year-end shopping season, up from 7.1 million units the previous year. Investors are eagerly monitoring console sales for signs of a slowdown in momentum. Sony had stated that it expected to sell 25 million PS5 systems this fiscal year, but as of the end of December, it had sold 16.4 million.
Sony cutting down PS5 Sales
Sony cut its sales prediction for the flagship PlayStation 5 console on Wednesday, citing slower transactions in its important gaming segment. The Japanese gaming giant said Sony now expects to sell 21 million PS5 consoles in the fiscal year ending March, down from a previous prediction of 25 million.
The drop in expectation comes after Sony reported record quarterly sales in the crucial December quarter, which includes the holiday season. Sony sold 8.2 million copies of its flagship PlayStation 5 console during the fiscal third quarter, which ran from October to December. Sony has sold 16.4 million PS5 systems so far this fiscal year.
Sony also reduced its fiscal year gaming division sales prediction by 210 billion yen to 4.15 trillion yen, citing expected hardware sales declines.
The company’s current problem is to maintain momentum for the PlayStation 5, which was introduced more than three years ago. In October, Sony released a new version of the system with improved specifications.
Sony’s game sales increased 16% year on year to 1.4 trillion yen in the December quarter, the firm announced on Wednesday. However, the division’s operational profit plummeted 26% due to increased hardware losses caused by promotions throughout the time, as well as a decline in first-party game sales. Sony also reduced its overall sales projection for the fiscal year to 12.3 trillion yen from 12.4 trillion yen.
Financial unit spinoff
Sony said that it will partially split off its financial services company through a public listing. As a result of the spinoff, the business intends to distribute somewhat more than 80% of its Sony Financial Group shares in the form of dividends in kind, with the listing scheduled for October 2025.
In the December quarter, Sony’s financial services segment saw revenue increase by more than 1,100% to 311.7 billion yen. The company stated that this was due to an increase in revenues at its insurance division. Sony saw a 21% increase in sales for its image sensor division, which sells to firms like Apple for iPhones.
Meanwhile, Sony called off a proposed merger with Indian company Zee Entertainment in January. The agreement, which had been negotiated for almost two years, was viewed as a means for Sony to get into the rich Indian entertainment sector.
Hiroki Totoki, Sony’s CFO, stated on Wednesday that India had “great growth potential.” He also stated that Sony will “seek various opportunities” in India, including plans to “replace” its failed merger with Zee Entertainment.
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