Sony reported a 7% drop in annual profits in the fiscal year 2023, with its financial services division dragging down the company’s performance. The flagship PlayStation 5 gaming console also narrowly missed its forecast for unit sales for the full year. In the March quarter, Sony exceeded revenue expectations at 3.5 trillion yen, representing a 14% year-over-year increase. However, operating profit fell slightly short at 229.4 billion yen, up 57% compared to the previous year.
The Japanese gaming giant’s 2023 revenue reached 13 trillion yen, a 19% increase year-over-year, but its operating profit for the full year decreased by 7% to 1.2 trillion yen. The firm sold 20.8 million units of the PlayStation 5 in the fiscal year, slightly missing the revised down target of 21 million units. Sony had originally forecasted sales of 25 million units before adjusting the target in February. The financial services business was identified as the primary segment driving down profit for Sony in 2023.
Operating income in Sony’s financial services unit decreased by 22.5% year-on-year to 173.6 billion yen. Additionally, the company experienced a 9% drop in operating income in the imaging and sensing solutions (I&SS) business, which includes imaging chips. Looking ahead, Sony is forecasting a 5% decline in overall group revenue for the current fiscal year ending March 2025, expecting sales to reach 12.3 trillion yen. However, the company anticipates an increase in operating income to 1.28 trillion yen, up 5% compared to the previous year.
Overall, Sony’s performance in fiscal year 2023 was impacted by lower profits in the financial services division and a decrease in operating income in the imaging and sensing solutions business. While the company saw a 19% increase in revenue, a 7% drop in operating profit led to below-target sales of the PlayStation 5. For the current fiscal year, Sony expects a modest decline in overall group revenue but a slight increase in operating income. The company will need to navigate challenges in its financial services and I&SS businesses to sustain profitability and overcome fluctuations in demand for its gaming consoles.
