Sony Group Corporation saw gains in sales and net profits in the fourth quarter of its financial year, but full year profits shaded down by 14%. For the newly begun financial year, running from April 2022 to March 2023, it forecasts further downward pressure on profits.
Group sales in the January to March period increased 1% to JPY2.26 trillion ($17.4 billion). Net income surged ahead by 67% to JPY111 billion ($853 million).
But the profits increase was not enough to stop the 12-month figures from turning downwards. Sales in the 2021-22 financial year increased by 10% to JPY9.92 trillion ($76.3 billion), but net profits fell from JPY1.03 trillion to JPY882 billion ($6.78 billion).
For the 2022-23 financial year, the group issued guidance indicating a 15% increase in sales, to JPY11.4 trillion ($87.7 billion), but a 6% deterioration in net profitability, and a fall to JPY830 billion ($6.38 billion).
The Pictures Division, which spans feature film, TV networks and television production, had a strong fourth quarter and a strong full year. In the fourth quarter it made profits of $101 million on revenues of $2.69 billion. Over 12 months it made profits of $1.94 billion (more than double the previous year’s $756 million) on revenues of $11 billion (compared with $7.10 billion previously).
Within the division sales gains came across the board, film, streaming revenues, licensing of catalog (“Seinfeld” in particular and the integration of the Crunchyroll acquisition. Profit margins became thinner as the unit felt the return to the full cost of feature film marketing, which had been curtailed during the height of the pandemic. It put 14 films into theatrical release (including hits “Venom: Let There Be Carnage,” “Spider-Man: No Way Home” and “Uncharted”) compared with six films in 2020-21 for a combined gross box office of just $46 million.
For the current year, Sony is forecasting that the pictures division’s profits will be reduced by more than half as such a string of hit films is unlikely to be repeated.
The Music Division delivered higher sales and higher profits over the twelve months to March 2022. Revenues grew from JPY939 billion to JPY1.12 trillion ($8.61 billion). Operating income grew from JPY185 billion to JPY211 billion ($1.62 billion).
There was growth for recorded music and for music publishing from paid subscription streaming services and advertising-supported streaming platforms. Foreign exchange factors also worked in the division’s favor as its earnings are largely outside Japan.
(Sony’s 2020-21 results were reported with JPY106 to $1. The 2021-22 results reflect an average exchange rate of JPY112 per $1. The Japanese currency has tumbled in recent weeks to JPY130 to the dollar. The latest figure is used throughout this Variety news report.)
The division’s top five titles in 2021-22 came from Adele, Doja Cat, The Kid LAROI, Lil Nas X and Harry Styles.
For the current year, the music division is forecast to grow both sales and operating profits, reflecting similar trends to last year, but also augmented by the acquisition of AWAL.
Sony’s Games & Network Services division, which spans hardware and software, recorded sales and profits that were only marginally ahead of the previous year. Revenues weighed in at JPY2.74 trillion or $21 billion (compared with JPY2.66 trillion). Operating income of JPY346 billion ($2.66 billion) compared with JPY342 billion.
Again, foreign exchange helped the divisional figures. There were also helped by expanded hardware sales, but hindered by a decrease in software sales, especially third-party games and add-on content.
The number of PlayStation Plus subscribers (47.4 million) and Monthly Active Users on PlayStation Network (106 million) were both fractionally weaker at the end of March 2022, compared with the end of March 2021 (47.6 million and 109 million MAU).