Japanese electronics and entertainment giant Sony Group Corporation reported net profits that were down 6% to JPY327 billion ($2.53 billion) in the three months from October to December, 2022, that represent the third quarter of its current financial year. Revenues were up 13% in local currency terms, to JPY3.41 trillion ($26.4 billion).

The group-level results reflected increased sales in music and games and networks services, but weakness in the pictures division, in comparison with an unusually successful period for the unit in the last three months of 2021.

Major currency fluctuations – a rise in the US dollar against the Japanese Yen in mid-2022, followed by a more recent weakening of the US currency, also make comparison tricky. The group said that in constant currency terms, the group would have recorded a 2% drop in sales.

Operating profits at the ‘Pictures Division’ which spans feature film, TV networks and television content production, weighed in at $179 million from sales of $2.35 billion. That compares with $1.31 billion of operating profits from revenues of $4.06 billion, which was a period when Sony Pictures Entertainment was benefiting from the release of “Spider-Man: No Way Home,” the latest instalment in one of the studio’s richest franchises, and “Venom: Let There Be Carnage.”

In the latest quarter, Sony released five features into North American theatrical, with “Lyle, Lyle, Crocodile” the highest grossing in the period, at just $96 million. The Pictures Division reported theatrical sales tumbling from $955 million to $106 million.

Sony said that it was fractionally reducing its full year sales forecast for the pictures division to reflect date changes for some theatrical releases and delayed deliveries of some television episodes. Its full year forecast for the division’s operating profits was not changed and remains at JPY115 billion ($891 million). However, that represents a 48% drop from the JPY217 billion recorded in “Spider-Man” year 2021-22.

The games and network services division saw sales leap by 53% to JPY1.25 trillion ($9.68 billion) helped by increased hardware sales, increased sales of new games titles and a hefty (positive) currency effect. Operating income from games and network services increased by 25%, hitting JPY116 billion ($900 million). The group increased its full year (April 2022 – March 2023) operating profit forecast for the games and network services division from a previous JPY225 billion to JPY 240 billion. That would still represent a year-on-year decline from JPY346 billion recorded in 2021-22.  

The music division enjoyed a 23% year-on-year increase in sales in the third quarter. Revenues came in at JPY364 billion ($2.82 billion) with operating profits picking up by 14% to JPY63 billion ($488 million). The divisional results were boosted by higher sales for recorded music, music publishing and paid subscription streaming, but offset by the weaker performance of visual media, which includes the Japanese anime activities. The group kept its forecast of the music division’s full-year sales and income unchanged.

Earlier on Thursday, Sony Group revealed a significant boardroom shuffle.

Yoshida Kenichiro, will retain his current roles as chairman and CEO but relinquish the title of president to Totoki Hiroki, with effect from April 1, 2023. Totoki, currently CFO, is to become president, remains as CFO and gets an additional new role as COO.

The moves were presented as strengthening management structure of a diverse and multifaceted conglomerate. The board reported in a regulatory filing that the changes were unanimously approved.

An interactive session between management and financial analysts followed the results announcement. After a set-piece presentation of the figures, the remaining session was entirely consumed by discussion of the management changes, with no other subject broached.

This meant that management did not comment on its entertainment business in India.

Late in 2021 the group agreed to merge its Sony Pictures TV business in India with that of rival Zee Enterprises. The deal is subject to multiple layers of regulatory scrutiny and Sony said at the time that it expected to close the deal in late 2022. It has taken longer than that, but unofficial sources in India have indicated to Variety that the final approvals could come within the next month.