- Sony (NYSE:SONY) reported a solid financial performance for Q3 2024, supported by a significant surge in its gaming unit
- The company saw a 37 per cent jump in quarterly profit for its gaming segment, with PlayStation 5 sales reaching 9.4 million units during the holiday shopping season, up from 8.2 million units in the same period last year
- The profit surge in Sony’s gaming segment was driven by increased sales from network services and reduced hardware losses. The company also reported a rise in users, with an additional 6 million joining in Q3
- Sony stock (NYSE:SONY) opened trading just over 4 per cent higher at US$$24.14
Sony (NYSE:SONY) reported a solid financial performance for Q3 2024, supported by a significant surge in its gaming unit.
The company saw a 37 per cent jump in quarterly profit for its gaming segment according to its latest financial statement, with PlayStation 5 sales reaching 9.4 million units during the holiday shopping season, up from 8.2 million units in the same period last year. This brings the total number of PS5 units shipped to 75 million, just 1.5 million behind the PlayStation 4 launch lines. Compare this to Microsoft (NASDAQ:MSFT) reportedly only selling two million Xbox consoles last year and 29 million overall.
The profit surge in Sony’s gaming segment was driven by increased sales from network services and reduced hardware losses. The company also reported a rise in users, with an additional 6 million joining in Q3. Monthly active users on the PlayStation Network rose by over 10 per cent from the previous quarter, reaching 129 million.
Sony’s group profit for the third quarter increased by 1 per cent year-on-year to ¥469.3 billion, surpassing analysts’ expectations. However, operating profit in its hardware segment, which includes cameras, remained flat due to weaker television sales. Despite a lack of high-profile titles, Sony reported strong software sales, with investors looking forward to upcoming releases to sustain consumer demand.
Sony reached a new all-time high in revenue during Q3, to the tune of US$11.05 billion, beating last year’s Q3 holiday performance.
President Hiroki Totoki expressed optimism for the gaming business in the next fiscal year, supported by anticipated releases such as Grand Theft Auto VI, which Take-Two Interactive Software (NASDAQ:TTWO) has confirmed (at this time) for an autumn launch.
In addition to its gaming success, Sony reported robust profit growth in its music business, which helped offset weaknesses in its pictures unit. The company raised its operating profit forecast for the year ending in March by 2 per cent to ¥1.34 trillion.
Kadokawa and Sony collaboration boosts gaming prospects
Sony’s investment in Kadokawa Corp. (OTC Pink: KDKWF), the parent company of Elden Ring developer FromSoftware, has started to pay off. In December last year, Sony became the largest shareholder in Kadokawa, and both companies are optimistic about the future of their collaboration. Kadokawa, which also publishes manga and anime, reported a 16.7 per cent increase in profits, with its gaming division seeing 40 per cent growth thanks to the success of Elden Ring’s DLC, Shadow of the Erdtree.
Kadokawa’s latest earnings report highlighted the positive impact of the Shadow of the Erdtree DLC on domestic and international revenue. The company is also looking forward to the release of Nightreign, a cooperative survival action title that offers a new way to enjoy the franchise.
The collaboration with Sony is expected to expedite the creation and distribution of intellectual property, with both companies committed to promoting joint projects. Sony’s earnings report emphasized the potential for value creation by combining Kadokawa’s strength in original IP with Sony’s technological and global expansion capabilities.
Share buyback plan and market reaction
Sony also announced a share buyback plan of up to 30 million shares worth approximately ¥50 billion. Following the announcement of its strong financial results, Sony’s shares closed up 8.7 per cent in Tokyo on Friday.
About Sony
Sony Corp. is one of the most comprehensive entertainment companies in the world, with a portfolio that encompasses electronics, music, motion pictures, mobile, gaming, robotics and financial services.
Sony stock (NYSE:SONY) opened trading just over 4 per cent higher at US$$24.14 and has risen 35.89 per cent since this time last year.
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