Sony Group Corp. said Thursday it is promoting Hiroki Totoki, its executive deputy president and chief financial officer, to president and chief operating officer, effective April 1.
Totoki, 58, will replace current President Kenichiro Yoshida, 63, marking the first change in the group's top post in five years, but he will also retain his position as chief financial officer. Yoshida will remain chairman and CEO with the right to represent the company.
"It is necessary to strengthen our group structure at a time of intense changes in the external environment from technological advancements to geopolitical risks," Yoshida said in a press conference.
"Totoki's strength is his strong will for growth, an important quality for an executive," he added. "He believes growth in the company will lead to growth in its employees."
The electronics giant, known for its iconic Walkman portable music players and PlayStation game consoles, has been diversifying its portfolio in recent years, announcing a 50-50 venture with Honda Motor Co. to make new electric vehicles, as well as aiming to enhance domestic production of semiconductors amid growing demand.
The firm was considering building a new plant in the southwestern prefecture of Kumamoto to produce chips for smartphones, according to reports last month.
Sony's strength lies in its wide range of businesses, preventing the firm from worsening all at once, Totoki said in a separate press conference the same day.
Totoki joined Sony, now the Sony Group, in 1987 and played a key role in the establishment of Sony Bank. He is known for his expertise in planning business strategies and identifying new business opportunities.
"I would like to create a positive spiral that begins with Sony being chosen by customers, which then energizes our employees, enables us to attract more new talent, increases our corporate value, and ultimately enables us to give back to society," Totoki said in a statement.
The announcement was made the same day the company released its earnings results, raising its net profit forecast for the year through March to 870 billion yen ($6.80 billion), helped by robust demand in its gaming division.
That would translate into a 1.4 percent drop in net profit from a year earlier, a narrower drop than was forecast in November when the company projected 840 billion yen.
"We were able to foresee issues and thereby make preparations to some extent, but we want to maintain a business structure that will keep us from missing the next wave of momentum for growth," Totoki said.
Sony said its gaming segment was boosted by favorable foreign exchange rates and hit works such as the PlayStation game "God of War Ragnarok," which sold 11 million copies in three months since its release in November.
The company put its assumed exchange rate for the U.S. dollar at 140 yen and around 138 yen for the euro for the current fiscal year 2022, up from 112.3 yen and 130.5 yen in fiscal 2021, respectively.
A weaker yen increases the value of Sony's overseas earnings when repatriated, although it inflates import costs for raw materials and components.
Meanwhile, sales of its PlayStation5 console rose to 7.1 million units in the third quarter, with the target revised upward to 19 million units.
The company's movie sector, in contrast, struggled in the third quarter, decelerating from the boost last year aided by its blockbuster film "Spider-Man: No Way Home."
But Totoki remained hopeful, noting that the company was getting ready to release hits, including "Spider-Man: Across the Spider-Verse" later this year, as well as works featuring other Marvel Comics characters.
Sony expects its operating profit for fiscal 2023 to fall 1.9 percent to 1.18 trillion yen and sales to increase 15.9 percent to 11.50 trillion yen from a year earlier.
The operating profit estimate was revised upward from the previous forecast of 1.16 trillion yen, while the sales estimate was revised downward from 11.60 trillion yen.
For the April-December period, Sony's net profit increased 4.9 percent to 808.97 billion yen. Operating profit rose 1.5 percent to 1.08 trillion yen, and sales grew 10.7 percent to 8.48 trillion yen.
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