Unveiling his first midterm strategy for electronics giant Sony, new CEO Kenichiro Yoshida took a conservative view Tuesday of the company’s overall profit picture but said he expects the film division’s profits to rise by up to 62% in three years.
By March 2021, Sony expects to achieve an operating profit of $1.2 billion to $1.5 billion, compared to a forecast of $1.7 billion for the current fiscal year, Yoshida said in Tokyo. One reason for the drop is shrinking profit for game consoles and other consumer hardware, which remain a core business for Sony despite drastic cutbacks to TV and other production under former CEO Kaz Hirai. Competition from China and other low-cost producers will force Sony to continue seeking other profit centers.
The outlook for Sony’s movie business is brighter, with a projected operating profit of $522 million to $612 million by the end of three years, in contrast to the $378 billion predicted for FY2018.
Yoshida, who was formerly CFO before taking over the top job April 1, stressed the importance of IP for Sony’s future. “Our vision of moving people’s emotions is unchanged,” he told reporters. “Our message this time is to pursue that further.”
Underlining that emphasis, Sony also announced the purchase of EMI’s music catalog for about $2 billion. This follows a recent Sony deal to acquire a major stake in Peanuts Holdings, the company managing Snoopy, Charlie Brown and other creations of cartoonist Charles M. Schulz.
Sony’s basic strategy for its Pictures division “is to strengthen and leverage Sony’s IP while also expanding the Media Networks business, particularly in India,” the company said in a statement. Sony currently owns 31 TV channels in India, the world’s second-most populous country. “This business is set to be a major asset to the company going forward,” the statement said.
At Sony Pictures Entertainment, the company will continue to pursue its strategy, implemented during Hirai’s tenure, of maximizing its library and other IP assets. One example cited was “”Jumanji: Welcome to the Jungle,” the 2017 hit sequel to the 1995 action-adventure smash “Jumanji.”