Sony gives upbeat outlook with help from music and games empire

[TOKYO] Sony Group projected profit this year largely in line with expectations as it pours further investment into its growing portfolio of intellectual property rights spanning music, movies and games.

For the year through March 2027, the Tokyo-based company expects an operating profit of 1.6 trillion yen (S$12.9 billion), roughly matching the average of analyst estimates. It reported worse-than-expected profit in its fiscal fourth quarter of 163.54 billion yen.

Sony will buy back up to 500 billion yen of its shares, the company said in announcing its full-year fiscal results on Friday (May 8). It will cancel 3 per cent of shares on May 29.

The company is in the midst of an overhaul, casting off unprofitable hardware businesses and fixing its focus on expanding IP-led divisions. It is close to securing a nearly US$4 billion deal for a music catalogue that includes the works of Justin Bieber and Neil Young, while earlier this year it surrendered majority control of its TV business to a joint venture with China’s TCL.

Its solid outlook may reassure investors about the pace of Sony’s transition and signals confidence in the company’s resilience to macroeconomic risks. Sony’s shares are down 22 per cent this year as escalating component costs erode margins across the consumer electronics industry.

The core games division combines the burden of escalating hardware costs with promising software margins. The upcoming release of Grand Theft Auto VI in the fall a likely catalyst to bring in more users to Sony’s entertainment platform and online services. BLOOMBERG