Sony just posted booming profits but told customers to expect more PS5 delays
- Sony posted third-quarter operating profits of $3.42 billion Wednesday, double analysts' estimates.
- It lifted its expected operating profit for the year to March by roughly a third, to $8.95 billion.
- But Sony said production delays might force customers to wait longer for their PS5 consoles.
Sony has raised its full-year profit outlook by a third, helped by pandemic-fueled demand for games, movies, and electronics, but says it is struggling to build enough PlayStation 5 consoles amid a global shortage of semiconductors.
The Japanese electronics and entertainment conglomerate made the announcements Wednesday as it released its fiscal third-quarter earnings. It said some customers might have to wait longer for their consoles as it competed for chips with other businesses such as smartphone makers and car companies.
"It is difficult for us to increase production of the PS5 amid the shortage of semiconductors and other components," Hiroki Totoki, Sony's chief financial officer, said at a press briefing.
This follows the chaos already associated with the PS5 launch. After its release in November, the console quickly sold out on online retail sites in the US, Europe, and Japan, thanks to demand for video games from people spending more time at home during the coronavirus pandemic.
Reseller bots quickly sneaked in, with one reseller group snagging nearly 3,500 consoles. And in the UK, some customers who ordered a PS5 for release day said Amazon shipped them random items instead, including a foot massager and pet food.
Despite the shortage of components and the problems associated with the PS5 launch, Sony still expects to sell more than 7.6 million PS5 consoles by the end of March, Totoki said.
The shift to the new games console is also expected to encourage gamers to move to online downloads or subscription services, helping Sony boost the profitability of its gaming unit.
Sony's operating profit for the October-to-December quarter jumped 20% to 359.2 billion yen, or $3.42 billion, from a year ago, double the 179 billion yen, or $1.70 billion, estimate from six analysts surveyed by Refinitiv.
The company has now lifted its expected operating profit in the 12 months through March by roughly a third to 940 billion yen, or $8.95 billion.
Alongside expecting continued demand for the PS5, Sony resumed some shipments of image sensors to customers in China in late November, Totoki said. Its revenue in this division was down 9.1% in the quarter.
The company had worried about the potential impact on its sensor business following US restrictions on sales of chips using US technology to the Chinese smartphone maker Huawei.
In November, Huawei revealed plans to sell its budget-brand smartphone maker Honor. After the spin-off, Honor last month said it had signed deals with chip suppliers and component makers, including Sony.
Huawei was Sony's second-largest image sensor customer after Apple, accounting for about fifth of its $10 billion in sensor revenue, according to analysts.
Historically better known for hardware like the Walkman music player and TVs, Sony has invested heavily in recent years in beefing up its entertainment offerings while streamlining its consumer electronics business.
This year it plans to close a factory in Malaysia that manufactures home-audio equipment, headphones, and other products.
The company has also delayed the release of four films - "Peter Rabbit 2: The Runaway," "Cinderella," "Ghostbusters: Afterlife," and "Uncharted" - as the coronavirus pandemic continues to wreak havoc on the movie industry.