Japan’s Sony raised its full-year forecast on Thursday after reporting record quarterly operating profit despite falling PlayStation 5 sales, boosted by gains at its image sensor and music divisions and a weaker yen.
Operating profit climbed 22% to 515 billion yen ($3.3 billion), 9% higher than LSEG’s consensus estimate, and it raised its annual forecast by 8% to 1.54 trillion yen.
The Japanese conglomerate has successfully pivoted from home electronics to entertainment over the years, but its shares have slumped in recent months as investors question what its future growth drivers will be.
Sales of image sensors used in smartphones grew 21%. Sony’s music business, home to artists including Beyoncé, Adele, SZA and Shakira, saw revenue from streaming services, live events and recorded music sales rise 13%.
The Japanese conglomerate also announced an expansion of its stock buyback program, and shares rose on the results but ended flat.
Concerns about soaring chip prices
Sony’s PlayStation 5 gaming console sold 8 million units in the key October-December quarter, down 16% from the same period last year as the console enters its sixth year on the market.
But the company reported an increase in monthly users for its PlayStation Network, reflecting increased engagement on the platform.
Profits in the gaming division rose 19% to 140.8 billion yen, helped by rising software sales and the depreciation of the yen.
The profit increase at Sony’s gaming business comes as many other technology companies warn that soaring memory chip prices could disrupt supply chains for everything from smartphones to laptops and raise consumer prices.
Shares of gaming peer Nintendo plunged on Wednesday on concerns about the impact of rising chip prices on profit margins, while shares of chip supplier Qualcomm also tumbled in after-hours trading after a disappointing second-quarter outlook amid a squeeze on memory chips.
Sony Chief Financial Officer Lin Tao said at the earnings conference that Sony has obtained the minimum amount of memory needed to cope with the shopping season at the end of next year.
Tao added that the company will further negotiate with suppliers to meet customer needs.
The adoption of artificial intelligence in the video game industry has also created uncertainty, with gaming stocks falling in recent days as Alphabet’s Google rolled out AI-powered game-making tools.
Sony’s console business is expected to get a boost from the launch of Take-Two Interactive’s delayed Grand Theft Auto VI, scheduled for release in November.
Serkan Toto, founder of consultancy Kantan Games, said GTA VI will “drive eye-popping sales for PS5, probably the best quarter of any PlayStation model.”
Sony said it will expand the size of its stock buybacks until May to 150 billion yen from the previous 100 billion yen.
© Thomson Reuters 2026
