© Reuters. A Sony electronic sign is shown in Rancho Bernardo, California May 12, 2016. REUTERS/Mike Blake/File Photo
By Sam Nussey
TOKYO (Reuters) -Sony’s operating profit fell 29% in the July-September quarter as the company was hit by a weaker performance at its image sensor and financial divisions.
Profit for the quarter was 263 billion yen ($1.74 billion). That compared with a 306 billion yen estimate from 10 analysts polled by LSEG.
The Japanese tech conglomerate has shifted from being the creator of iconic household electronics such as the Walkman to an entertainment behemoth straddling games, movies and music and is also a leading maker of image sensors.
Profit at Sony (NYSE:)’s chips division slumped by 38%, hit by higher expenses and weaker image sensor sales.
The conglomerate is targeting sales of 25 million PlayStation 5 (PS5) consoles this financial year but in August said it was resorting to promotions to boost slower than expected sales.
Sony sold 4.9 million PS5 units in the second quarter, compared to 3.3 million units in the same period a year earlier.
Industry observers were surprised by the recent announcement that gaming chief Jim Ryan will step down next March.
The Oct. 20 release of “Marvel’s Spider-Man 2” offers cheer going into the key year-end shopping season, with the game becoming the fastest selling PlayStation title ever.
Five million units of the game have been sold at the end of October, Sony said.
Rival Nintendo has scored a string of hits in recent months as the company continues to draw in gamers despite eschewing the cutting edge graphics Sony and Xbox maker Microsoft (NASDAQ:) have pursued.
Sony hiked its full-year sales forecast for the games unit by almost 5% to 4.36 trillion yen. Profit was supported in the second quarter by higher sales of third-party games but impacted by an increase in hardware losses.
Sony’s movie division will co-finance and distribute a live action adaption of Nintendo’s iconic “Zelda” franchise, leading to analysts raising the possibility of further collaboration between the two leading Japanese entertainment companies.
“Sony’s strong distribution network and publishing track record could make it a strategic move for Nintendo,” Jefferies analyst Atul Goyal wrote in a client note ahead of Sony’s earnings.
The company maintained its full-year operating profit at 1.17 trillion yen but raised its sales and net income forecast by 2% each.
($1 = 151.0600 yen)
