Sony Group Corp. has improved its profit forecasts due to strong performance in its gaming division and lower-than-expected tariff impacts.
Increase in Sony's Profit Forecast
Sony has raised its annual operating profit forecast by 4% to ¥1.33 trillion (around $9.01 billion) due to strong performance in its gaming division and a smaller-than-expected impact from U.S. tariffs. The anticipated tariff impact is now ¥70 billion, down from a previous forecast of ¥100 billion.
Gaming Division Performance
In its earnings report for April to June, Sony reported a 36.5% year-on-year increase in operating profit, reaching ¥340 billion, significantly surpassing the average estimate of ¥288 billion from analysts. The gaming division's profit more than doubled to ¥148 billion, fueled by a surge in network service revenue and strong sales of third-party game titles, including 2.5 million PlayStation 5 units sold in the first quarter, which is a 4% increase compared to the previous year.
Sony's Business Expansion
Sony's transformation from a household electronics manufacturer to a leading force in entertainment and technology is paying off. Once known primarily for its Walkman, the company now spans games, music, movies, and smartphone image sensors. Additionally, Sony plans to reduce its ownership stake in its financial services business to below 20% and list the unit on the Tokyo Stock Exchange on September 29.
Sony's strong quarterly earnings have attracted positive investor attention, leading to a 4% increase in the company’s shares. Continued success in its gaming division and adaptation to market changes provide a basis for optimistic forecasts moving forward.
