Sony Expects Growth in Gaming Sector Due to PS5 Effect... Promising Electric Vehicle Technology

Eugene Investment & Securities Report

[Asia Economy Reporter Minji Lee] Opinions have emerged that Sony will deliver strong performance based on growth in the gaming sector driven by new product launches and future electric vehicle technology capabilities.

Sony is a leading Japanese electronics company that currently operates as a conglomerate spanning hardware, gaming, semiconductors, content, and finance. The revenue distribution by main business divisions is 24% from Game & Network Services, 10% from Music, 12% from Pictures, 24% from Electronics Products & Solutions, and 13% from Semiconductors.

According to the financial investment industry and Sony on the 7th, the Q4 (fiscal year Q3) revenue was 2.6965 trillion yen, a 0.4% decrease compared to the same period last year. Operating profit recorded 359.2 billion yen, a 14% increase, significantly surpassing market expectations of 198.6 billion yen.

The annual guidance expects revenue of 8.8 trillion yen and operating profit of 940 billion yen, representing increases of 6.5% and 11.2% respectively compared to the previous year. This is a 3.5% and 34.3% upward revision from the previous guidance. Kyungtak Noh, a researcher at Eugene Investment & Securities, said, “This is due to an increase in orders exceeding major customers’ expectations and strong demand for electronic products,” adding, “Operating profit guidance for the semiconductor and electronics products divisions was raised by 68% and 81% respectively, making an increase in operating profit compared to last year possible.”

The gaming division is expected to record an operating profit of 80.2 billion yen, a 50% growth compared to the same period last year. This is due to a roughly 40% increase in revenue compared to a year ago, driven by the PS5 effect launched last November. Sony sold 4.5 million units of hardware by the end of December. Researcher Noh explained, “Supply is still insufficient compared to demand,” and added, “With increased PS PLUS subscription rates and game playtime, software and service revenue will rise, pushing the annual gaming division revenue to a record high of 2.6 trillion yen.”

Furthermore, Noh stated, “The gaming division is the core of Sony’s performance,” and added, “In the mid to long term, the value of Sony’s exclusive content is expected to increase further with the growth of the cloud gaming market.”

The electronics products division recorded an operating profit of 22.2 billion yen, a 32% increase compared to the same period last year. Despite the rise in TV panel prices due to tight panel supply, the recovery in demand for home AV systems and digital cameras, along with an improved product mix such as an increased share of premium TVs, has enhanced profitability. The smartphone division’s operating profit was 21.3 billion yen, showing improvement following restructuring effects from the previous quarter.

The semiconductor division recorded 50.4 billion yen, a 33% decrease compared to a year ago. Sales declined due to the suspension of supply to Huawei, which accounts for 20% of image sensor sales. Researcher Noh said, “Profit and loss worsened due to increased R&D expenses and depreciation,” but added, “However, supply to Huawei resumed from November last year, so improvement in Q1 results is expected.”

Future electric vehicle technology is also promising. Researcher Noh explained, “The electric concept revealed at CES, Vision-S, has started road testing in Europe, and Sony is expected to stand out in the electric vehicle sector with its automotive components, solutions, and connectivity platforms.”

This content was produced with the assistance of AI translation services.