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Sony predicts a big jump to reach the annual profit in the sweepstakes strategy



TOKYO (Reuters) – Japan's Sony Corp. Boosted its profit forecast for the year after a strong second quarter by 30 percent to a record high, driven by popular gaming titles such as "Marvel Spider-Man" and a growing demand for online gaming services.

A Sony Corp logo can be seen in an electronics store at Narita International Airport, Narita, Japan on November 1

, 2016. REUTERS / Toru Hanai

The results are a testament to a strategic shift by the entertainment and electronics company to build more content-driven businesses, such as games, that generate recurring revenues and are less prone to the ups and downs of consumer electronics sales.

"Sony, more than most people, has become a company that generates revenue through content – until a few years ago, there was always the fear that it would revise hardware issues, but now it has turned into stable profits." said Hideki Yasuda, an analyst with Ace Securities.

Sony now expects an annual operating profit of 870 billion yen (7.7 billion US dollars), a level that clearly exceeds market expectations of 796 billion yen. The gambling business will be the biggest profit driver with 310 billion yen.

Major gaming hits exclusive to Sony have offset declining sales for today's five-year-old PlayStation 4 main console.

The action-adventure title "God of War" sold 3.1 million copies in the first three days after its release in April. This is the fastest selling rate of all PlayStation first-time titles in history. The record was renewed just five months later, when "Marvel's Spider-Man" was released in September and sold 3.3 million in the first three days.

"We were very blessed with some blockbuster titles," said Chief Financial Officer Hiroki Totoki on a earnings statement. "The lineup will remain strong in the second half of the year."

The subscriber-based PlayStation Plus service also saw a steady increase in subscribers, while the Fate / Grand Order role-playing game took place in the Japanese mobile games market. released by a unit of Sony's Music Division continues to deliver a strong performance.

In the second quarter, operating income increased 17 percent to 239.5 billion yen. The profit for the gaming area rose by 65 percent.

Sony has also increased its annual earnings forecast for its semiconductor business, which includes imaging sensors, by 17 percent to 140 billion yen.

Although the global smartphone market is getting older and older, demand for Sony's image sensors continues to be good as mobile phone manufacturers introduce multi-lens camera systems for high-end models.

Sony now intends to invest 600 billion yen in imaging sensors in the three years to March 2021. This represents an increase of 20 percent over the previous target and half of the group's planned investments.

Sony controls more than half of the market for smartphone image sensors for customers such as Apple Inc and most other handset manufacturers.

Meanwhile, Sony's own smartphone business was one of the few weaknesses in its robust earnings, as the company is now exploiting a $ 95 billion loss this fiscal year and expects business to return profitable only next year. April 1965. [19659004] "We will further reduce the business to minimize risk," said Totoki, adding that the company had no intention of leaving the business altogether.

Also on Tuesday, Nintendo Co Ltd, a domestic gaming expert, said sales of switch consoles and games boosted operating profit by 30 percent between July and September, adding the company's highest quarterly result in eight years to reach.

($ 1 = 112.71 yen)

coverage by Makiko Yamazaki; Edited by Edwina Gibbs and Christopher Cushing

Our Standards: The Thomson Reuters Trust Principles.

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