Sony reports record net profit but forecast cautious

Sony issued a cautious forecast for the year ahead
Sony issued a cautious forecast for the year ahead Yuki IWAMURA AFP
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Tokyo (AFP)

Sony has ended the financial year with fanfare, announcing its biggest-ever net profit Wednesday thanks to unprecedented pandemic-driven demand as people around the world turned to gaming to liven up lockdowns.

But with hope on the horizon for an end to the pandemic as vaccines roll out in many parts of the world, the Japanese giant issued a more cautious forecast for the year ahead.

Although the pandemic has hit many industries hard, the gaming sector has been one of the few to experience an unprecedented boom.

The Tokyo-based entertainment and consumer electronics giant said annual net profit jumped to 1.17 trillion yen ($10.7 billion), more than doubling from the previous year on sales of 8.99 trillion yen.

But for the fiscal year that began in April, they forecast net profit of a more modest 660 billion yen, on sales of 9.7 trillion yen, with the gaming sector anticipating an eventual tapering of the soaring demand linked to the pandemic.

This financial year also saw the launch last November of Sony's much-anticipated PlayStation 5 console which set off a head-to-head battle for holiday sales with the new Xbox from Microsoft.

"The impact of lockdown demand on its game sector was sizable though the pandemic hit revenue from movie theatres hard," said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo.

"Sony experienced both positive and negative aspects of the coronavirus, but overall, the pandemic benefited Sony a lot," Yasuda told AFP before the firm's results were announced.

Despite the disastrous impact of the pandemic on film businesses, Sony's animation unit Aniplex scored a box-office triumph with the anime epic "Demon Slayer", which in December became Japan's top-grossing film of all time.

Sony, which started as a tiny radio maker in the early years after World War II, is now enjoying steady growth in its entertainment businesses as a vital source of revenue.

It recently announced a multiyear accord to give Netflix exclusive US rights to its new movies after they leave theatres, allowing the streaming giant access to future instalments of franchises such as "Spider-Man".

The manufacturer of the Walkman has recorded a strong performance in recent years after recovering from massive losses in the early 2010s, when it struggled to overcome deep financial trouble by cutting jobs and selling divisions.