Sony raised its outlook for the current fiscal year, thanks to sales of the PlayStation console and a stake in recently listed Spotify. However, the company's mobile business keeps shrinking.
Net income will be 500 billion yen ($4.5 billion) on sales of 8.6 trillion yen through next March, the Tokyo-based company said. Sony cited higher-than-anticipated game sales for the revenue revision, while the recent market debut of the music-streaming service added cash to the bottom line.
The company also reported a strong June quarter, with operating profit of 195 billion yen.
The PlayStation unit's revenue climbed 36 percent during the quarter and operating profit nearly quintupled, riding stronger-than-expected sales of new games including God of War and Detroit: Become Human. More titles were also sold digitally through its PlayStation Network, which generates higher profit margins than through brick-and-mortar stores.
That gave Sony confidence to bump its expectations for the gaming division's full-year revenue by 15 percent, and raise the outlook for operating profit by 32 percent. It also raised its forecast for PS4 unit sales to 17 million from 16 million.
Here's a look at how Sony' individual businesses performed:
- Games: Operating profit rose from a year earlier to 83.5 billion yen. During the quarter, the company had few surprises to share at the Electronic Entertainment Expo (E3) and also angered gamers over its lack of cross-platform play for Fortnite. In April, researcher Newzoo predicted that mobile games will account for more than half of the gaming industry's revenue this year, while consoles will fall to 25 percent.
- Music: Streaming continued to grow, with Spotify last week announcing monthly active users had grown to 180 million, topping estimates. That boosted royalties received by Sony, sending operating profit up 28 percent from a year ago to 32.1 billion yen. The unit also got a lift from the on-going popularity of mobile game Fate/Grand Order.
- Chips: Operating profit fell 47 percent to 29.1 billion yen. Cooling demand for smartphones was the primary driver in Sony's weaker-than-expected full-year forecast in April. Sony is the largest supplier of camera chips to phone makers including Apple Inc. and last week unveiled a new chip that quadruples megapixel quality.
Sony Mobile's already tiny smartphone business has shrunk by almost half. In the quarter ending in July 2018, Sony managed to sell only 2 million mobile devices, down 1.4 million from the same period in the preceding year.
According to CFO Hiroki Totoki, Sony's Mobile Business recorded an operating loss of 10.8 billion yen was recorded in the current quarter, compared to a profit in the same quarter of the previous fiscal year, primarily due to the impact of the decrease in sales.