Japan's Sony Corp expects profit to decline after pandemic boom

The firm expects operating income to slip 4.3% this business year

Japan's Sony Corp on Wednesday said it expects operating income to slip 4.3% this business year following record profit from sales of music, gaming and other content to people forced to stay at home by COVID-19 lockdown measures.

That demand has helped Sony continue its shift from consumer electronics to entertainment content and digital subscription services, though analysts said it may wane as more people in key markets such as the United States get vaccinated against the novel coronavirus.

For the business year started April 1, Sony forecast profit to fall to 930 billion yen ($8.53 billion), missing the 976.4 billion yen average of 19 analyst estimates, Refinitiv data showed.

Sony benefited from strong demand for its new PlayStation 5 games console last business year, which launched in core markets in November and quickly sold out. It wants to use the console to encourage online game downloads and attract subscribers.

To beef up entertainment content, Sony is pursuing acquisitions and distribution deals. In December, Sony agreed to buy AT&T Inc animation business Crunchyroll, giving it 3 million new subscribers across 200 countries.

This month, Sony said it had reached a deal with Walt Disney Co to offer "Spider-Man" movies and other films on Disney's streaming service after they are shown on Netflix Inc's service, which had already agreed a streaming deal.

In the three months through March, Sony posted profit of 66.5 billion yen - almost double the same period a year earlier. That result compared with a 76.1 billion yen average of five analyst estimates compiled by Refinitiv.

($1 = 109.0200 yen)

 

(Reporting by Tim Kelly; Editing by Christopher Cushing)