Sony Corp yesterday said it expects the profitability of its games division to rise as the Japanese company prepares to launch a virtual-reality (VR) headset to complement its PlayStation (PS) and streaming services.
The company is targeting an operating profit margin of 8 to 10 percent for its games and network services division in the year ending March 2018, up from 5 to 6 percent previously.
It raised its target for revenue at that unit to between ￥1.8 trillion and ￥1.9 trillion (US$17.6 billion and US$18.6 billion), up from ￥1.4 trillion to ￥1.6 trillion previously.
Photo: Bloomberg
“Games and network services are the biggest growth drivers in our mid-term plan,” Sony chief executive officer Kazuo Hirai told reporters in Tokyo. “Beyond just games, VR offers an opportunity to make full use of multiple Sony technologies, such as cameras and shooting, content production capabilities and entertainment assets.”
Sony’s film arm encompasses Columbia Pictures and is home to such major Hollywood franchises as Spider-Man and TV classics including Breaking Bad.
On Wednesday, Hirai reaffirmed Sony’s overall targets for operating profit of at least ￥500 billion in the year ending March 2018.
He also said the company is working on a robot capable of forming emotional bonds with people and will start a corporate venture-capital fund next month to seek out promising technology.
Sony is now looking to cement its lead over Microsoft Corp’s Xbox One and Nintendo Co’s Wii U consoles by launching a VR headset this year. The US$399 PlayStation VR is to be available to the more than 36 million people who already own a PS4 when it goes on sale in October.
The device might help convert more PS4 owners into video-game subscribers who then pay monthly fees, said Jitendra Waral, a Bloomberg Intelligence analyst.
Sony had forecast sales of its PS4 consoles would climb 13 percent this fiscal year to 20 million units.
The company has forecast profit at its games and network services business will rise 52 percent to ￥135 billion this fiscal year. Subscribers to its PlayStation Vue Web-TV service have exceeded 100,000 since its debut in March last year, people with knowledge of the matter have said.
Sony slashed its target for mobile unit sales from a range of ￥1 trillion to ￥1.25 trillion to a range of ￥900 billion to ￥1.05 trillion. The industry is facing its worst year since Apple Inc introduced the iPhone in 2007. While much of the drop in demand is expected in mature markets and China where Sony no longer develops phones, the broader slowdown might hurt its image-sensor business, which supplies camera components for phones.
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