Sony lifts outlook on entertainment demand despite tariff threat
The Tokyo company now expects its operating profit for the year ending March to total ¥1.33 trillion ($9 billion), versus an average of analyst estimates of ¥1.39 trillion.
In May, in the midst of uncertainty around Washington's new import tax regime, Sony had warned its profit would take a ¥100 billion hit and set its forecast at ¥1.28 trillion. It said it now sees a tariff impact of around ¥70 billion on its operating income.
Sony's music unit has grown to be a reliable pillar of the group, bringing in a steady flow of revenue as opposed to the company's more prominent but fluctuating consumer electronics, PlayStation and image sensors. Royalty income from music streaming operators remains strong, and popular anime works produced under the Sony umbrella are helping catapult in-house artists into the mainstream.
Sony's anime units have consistently produced hits at home and abroad.
Income from Sony's anime work is expected to increase in the months to come, with the latest Demon Slayer movie earning a record ¥12.9 billion in its first 10 days at the Japanese box office. Aniplex also operates Fate/Grand Order, a hit smartphone game that is celebrating its 10th anniversary this year.
U.S. President Donald Trump's threat to impose a 100% tariff on semiconductor imports and another possible levy on products containing chips weighs on Sony and other hardware makers, however. Sony makes camera sensors for Apple's iPhone and most of its Android-based competitors. The declared tariffs, if implemented, may force a rejig of supply chains with far-reaching implications for exporters around the world.
Sony's PlayStation unit is promising to focus on profitability and to rein in marketing costs for hardware. The company's in-house studio will release Ghost of Yōtei, a sequel to Sony's hit game, Ghost of Tsushima, in October that should contribute to beefier sales during the year-end shopping season.
Meanwhile, the company's image sensors business faces weak handset demand as well as seismic shifts in the supply chain.
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