Sony’s strong profit vindicates CEO’s gaming-led strategy

Operating income from sale of PlayStations and software has doubled

Sony’s resurgent games division helped the Japanese conglomerate blow past quarterly results expectations, vindicating CEO Kazuo Hirai’s growing focus on media and entertainment.

Sony, which in years past has scaled back in businesses from phones to TVs, posted a surprise profit for the June quarter. It more than doubled operating income from the sale of PlayStations and software, a particularly optimistic signal given the company’s next marquee products haven’t yet come to market.

Sony is looking to cement its lead over Microsoft and Nintendo by launching a virtual-reality headset in October in the US, as well as a souped-up version of the PS4 potentially before the end of the year. The twin gadgets mark Hirai’s long-term effort to dominate the industry with the PlayStation division, While Sony managed to post a rare profit in phones, it was the games unit that impressed. Quarterly revenue from that division rose 15 per cent to 330.4 billion yen and profit more than doubled to 44 billion yen. It sold 3.5 million PlayStation 4 consoles in the quarter, and kept its annual outlook for sales unchanged at 20 million units. which he helped launch in 1994 before being tapped as CEO.

“Nothing short of fantastic, especially given that the market has been expecting a loss,” Amir Anvarzadeh, Singaporebased head of Japanese equity sales at BGC Partners, said in an email. “The big takeaway was the games business. Profit there more than doubled and

that’s even before PlayStation VR launch in October, which will be a huge shot in the arm for hardware sales.”

Sony reported net income of 21.2 billion yen (Dh757 million) in the quarter through June, compared with the average analysts’ expectation for a 39 billion-yen loss.