Sony posted strong second-quarter profits on the gaming business, rising to the PlayStation

Sony boosted its annual profit outlook after reporting an astonishing second-quarter profit growth on Wednesday, as its gaming business continues to capture “nesting” demand driven by the COVID-19 lockdown system.

The July-September profit reached JPY 317.76 billion (approximately Rs 22,500 crore), up 13.9 per cent from JPY 278.96 billion (approximately Rs 19,700 crore) in the same period a year ago, the entertainment and electronics company said in a statement.

The results were compiled by Refinitiv, comparing JPY 197.55 billion (approximately Rs 14,000 crore) with an average of 11 analyst estimates. Sony has raised its annual profit forecast for JPY 700 billion (approximately Rs 49,600 crore) from the previous JPY 620 billion (approximately Rs 43,900 crore). This compares to JPY 672.33 billion (approximately Rs 47,600 crore) with the consensus of 24 analysts.

The firm now forecasts its gaming division to post annual profits of JPY 300 billion (approximately Rs 21,200 crore) from an earlier estimate of Rs 240 billion (approximately Rs 17,000 crore).

Customer transfers to gaming software downloads and online subscription services during the lockdown have boosted profits despite the end of the PlayStation 4 console’s life cycle.

Such high-margin online revenue will help Sony’s gaming business stay profitable this year, surpassing the huge marketing and production costs associated with the launch of the PlayStation 5 (PS5) console next month.

Sony has sold as many PS5 consoles in the United States in the first 12 weeks as for its predecessor, the PlayStation 4 device, Jim Ryan, CEO of Sony Interactive Entertainment, said in an interview.

“The demand expressed by the pre-order level was very, very significant,” Ryan told Reuters.

ম Thomson Reuters 2020

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