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Sony expects sales of its PlayStation 5 gaming console to exceed those of its popular predecessor system this year, though it warns that the global chip crisis is likely to persist for the next 12 months.
The Japanese group’s goal for the new console came when the pandemic-driven gaming boom raised its annual profits to a record, even when the trade dispute between the United States and China caused a strong success in the image sensor business.
On Wednesday, Sony also said it would buy up to 200 200 trillion ($ 1.8 trillion) in its own shares, which are trading near a 20-year high.
Since its launch in November, Sony has sold 7.8 million PS5 consoles, slightly more than the PS4 units sold during the same period after the launch of the latter system in 2013. For the new fiscal year, which ends in March 2022, the company said it would aim to sell more PS5 than the 14.4 million PS4s sold during the second year after its release.
“It remains the case that supplies have not been able to keep up with the strong demand for PS5,” Hiroki Totoki, Sony’s chief financial officer, said in an online briefing on Wednesday. “We expect semiconductor-focused supply constraints for devices to continue in this current fiscal year.”
But after a year of overproduction, Sony is looking for weaker profits in many of its core businesses, including games, music, and image sensors.
For the twelve months to March 2022, the group expects its net profit to fall by 44%, to 60 660 million, due to the increase in tax expenditures. This came below analysts ’forecast of 43 743 billion, according to S&P Global Market Intelligence. Revenue is expected to increase by 8 percent to ,7 9.7 million.
During the January-March quarter, there were some symptoms of a slowdown in the gaming division, with a 3.7% drop in digital software sales over the previous year, despite strong demand for PS5 hardware.
“There is no doubt that there is a very strong demand for PS5 hardware, but it is still unclear whether the demand for software is maintained,” said Hideki Yasuda, a gaming analyst at the Ace Research Institute.
Sony expects the operating profits of its gaming business to fall 5% to 325 billion euros this year, but Yasuda says the decline is less than expected. He noted a reduction in transportation costs as the company sends more consoles by sea instead of more expensive air freight.
Beyond gaming, the operating profits of its image sensor division fell 41% during the first three months of 2020 after sales of its CMOS sensors to Huawei, its second customer after Apple, were affected by US sanctions against the Chinese telecommunications group.
Totoki said the company expects to recover the volume of losses caused by Huawei’s impact on other customers during the current fiscal year, while profits are expected to recover as of April 2022.
For the January-March quarter, Sony said its net profit rose 8.5 times to 107 107 billion from the previous year, while revenue rose 27% to ¥ 2.2 .
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