Sony Reports 7% Drop in Annual Profit

May 14

Sony reported a 7% drop in its annual profit for the full year in 2023, with operating profit at 1.2 trillion yen, down 7% year-over-year. The company also narrowly missed its revised-down target for PlayStation 5 sales, with shipments totaling 20.8 million in the fiscal year 2023. This is slightly lower than the revised 21 million unit target that Sony gave investors in February. Sony expects even weaker sales of 18 million units of its PS5 in the year ending March 2025.

The company announced a management shakeup in its Sony Interactive Entertainment (SIE) gaming unit, with the division's interim CEO Hiroki Totoki becoming chairman of the business. Long-time Sony executives Hideaki Nishino and Hermen Hulst were appointed CEO of the Platform Business Group and Studio Business Group, respectively, two newly created divisions of SIE.

Sony said its financial services business was the primary segment driving down profit, with operating income in 2023 coming in at 173.6 billion yen, marking a 22.5% year-on-year drop after a firm increase in 2022. The company also suffered from a decline in its imaging and sensing solutions (I&SS) business, which houses its imaging chips.

Sony is forecasting a drop in overall group revenue for the current fiscal year, with sales expected to reach 12.3 trillion yen for the year ending March 2025, down 5%. Fiscal year 2024 operating income is expected to total 1.28 trillion yen, up 5%, Sony said in its consolidated results.

Two veteran executives will take over as CEOs of its powerhouse gaming unit, taking the reins from Jim Ryan who retired in March. Hermen Hulst and Hideaki Nishino will report to Sony Interactive Entertainment's (SIE) group chairman Hiroki Totoki, who had been filling in as interim CEO.

Hulst will be CEO of the newly named Studio Business Group, which includes PlayStation's developers and covers the expansion of PlayStation brands into TV and film. Nishino will lead the Platform Business Group, which includes console hardware, technology, and accessories, and be in charge of relations with major publishers and indie studios.

The PlayStation 5 faces stiff competition from the Nintendo Switch and could see a tougher rivalry with Microsoft's Xbox, after the tech giant's buyout of "Call of Duty" maker Activision Blizzard. Sony under Ryan spent heavily on buying games studios, including Bungie, Epic Games, and FromSoftware.