Sony cuts profit forecast

Sony (NYSE: SONY) said the business would draw support, however, from its upcoming game slate and as it addresses supply chain snags that have disrupted production of its hit PlayStation 5 console.

Operating profit at Sony’s key gaming unit fell 37% in the April to June quarter from a year ago, which Chief Financial Officer Hiroki Totoki blamed on a lack of top titles and the return of normalcy to people’s lives amid the COVID-19 pandemic.

Sony cut the annual operating profit forecast for its gaming unit by 16%, citing an expected fall in games sales from external developers while booking expenses from an earlier-than-expected closing of its deal for “Halo” creator Bungie.

Its group-wide operating profit forecast for the year to next March was cut by 4% to 1.11 trillion yen ($8.37 billion).

Sony posted a 9.6% rise in first-quarter operating profit to 307 billion yen, beating analyst estimates, boosted by demand for its movies and television shows.

Sony vs Microsoft

The conglomerate has said it aims to sell 18 million of its hit PS5 consoles this fiscal year as supply chain snarls ease and it ramps production. It sold 11.5 million units in the year ended March.

Sony sold 2.4 million PS5 units in the first quarter, which only slightly increased from the same period a year earlier, while software sales slumped 26% to 47 million.

Sony competes with Microsoft Corp (NASDAQ: MSFT), aggressively acquiring content to push its Xbox Game Pass subscription service.

This week, Sony’s Redmond, Washington-based rival, reported a decline in gaming revenues in its fourth quarter, and upcoming high-profile game titles have been delayed.