Sony Group Corp. on Wednesday raised its operating profit outlook for the current business year to a record 1.20 trillion yen ($10.45 billion), as solid movie and mobile gaming segments along with a weak yen against the U.S. dollar are expected to make up for weak sales of its PlayStation 5 game consoles amid a global chip crunch.
In October, the Japanese electronics and entertainment giant forecast an operating profit of 1.04 trillion yen for the year through March.
Sony expects its net profit to fall 16.5 percent to 860 billion yen and sales to increase 10.0 percent to 9.90 trillion yen.
The net profit estimate was revised upward from the previous forecast of 730 billion yen, while the sales estimate was maintained.
Its videogame unit Sony Interactive Entertainment LLC said earlier this week that it would acquire Bungie Inc., a U.S. videogame company and developer of the "Destiny" series, for $3.6 billion.
"We will obtain new users from platforms other than PlayStation and enlarge our gaming ecosystem through a long-term growth strategy," Chief Financial Officer Hiroki Totoki said in an online press conference.
It plans on developing more than 10 new live game titles by fiscal 2025 through the tie-up, thereby more than doubling revenue in the segment.
The move followed the announcement by Microsoft Corp., the maker of Xbox game consoles, earlier in January that it plans to buy "Call of Duty" game creator Activision Blizzard Inc. for $68.7 billion.
Meanwhile, the global shortage in semiconductors and supply chain bottlenecks led to a fall in sales of its PlayStation 5 consoles, which were released in late 2020, as well as a 20 percent drop in user engagement in December compared to a year earlier.
The global sales target for the game console this fiscal year is expected to fall from the initial target of 14.8 million to 11.5 million units, with Totoki adding he expected constraints to continue for the foreseeable future.
Another boost for Sony came from its blockbuster film "Spider-Man: No Way Home," which became Sony Pictures Entertainment Inc.'s biggest hit. In addition, licensing fees from the American sitcom "Seinfeld" also lifted revenue.
Regarding Sony's venture into electronic vehicles, Totoki noted that the firm had much to learn about automobiles before announcing details on its scope.
Sony announced last month it was looking to set up a new unit for electric vehicles in the spring as global competition intensifies over the development of EVs, with many automakers shifting to such vehicles for carbon emission reductions.
"We plan on transforming the automobile into a new area for entertainment," he said.
For the April to December period, Sony's net profit declined 19.9 percent to 771.10 billion yen as sales grew 13.2 percent to 7.66 trillion yen. Its operating profit rose 19.7 percent to 1.06 trillion yen.