Sony Corp reported weaker profits in the PlayStation business and cut its annual revenue forecast, triggering the steepest share decline in almost three-and-a-half years.
The stock fell 8.1 percent in Tokyo yesterday, the most since September 2015, after operating income in games fell 14 percent to ￥73 billion (US$666 million) for the holiday quarter. The Tokyo-based company sold 8.1 million PS4 consoles, down from 9 million a year ago, it said in a statement on Friday last week.
The PlayStation 4, headed for its sixth year, will likely surpass the 100 million unit sales milestone by the middle of this year, cementing it as one of the best-selling consoles in history. Even so, this year’s software lineup is not as impressive as it was last year, when blockbuster titles like God of War, Spider-Man and Red Dead Redemption 2 debuted. For the full fiscal year, Sony kept its forecast for the games division of ￥310 billion. Now, attention is turning to the details and timing of the next-generation console.
For total sales, Sony lowered its outlook to ￥8.5 trillion for the fiscal year through March, compared with the prior forecast for ￥8.7 trillion. Weaker demand for camera chips, mobile handsets and financial services were behind the revision although a tax adjustment will boost net income.
The figures underscore the struggle at big technology companies, which are seeing slowing demand for their products and services. Apple Inc reported a decline in revenue for the first time in two years, while chipmakers Intel Corp and Nvidia Corp have warned of weaker sales as China’s economy starts to sputter and looming uncertainly over Brexit.
“It’s definitely not as positive as the headline numbers would suggest. It feels slightly negative overall,” said Andrew Jackson, head of Japanese equities at Soochow CSSD Capital Markets in Singapore.
Sony’s operating profit in the last three months of last year was ￥377 billion, compared with analysts’ projection for ￥365 billion. After adjusting for a one-time gain in the music business, the result was significantly lower, at ￥260 billion. Quarterly sales fell 10 percent to ￥2.4 trillion.
The mobile division continued to struggle, with an operating loss of ￥15.5 billion during the quarter, the fourth straight period. Chief executive officer Kenichiro Yoshida has so far rebuffed pressure to sell off the unit, saying it is vital for pushing innovation including 5G research.
“The market is closely watching for a turnaround in the mobile communications business, but it looks things are worse year-on-year due to a decrease in smartphone unit sales,” Jackson said.
Sony’s camera chips business is also seeing an impact from slowing global demand for smartphones. Operating profit in chips fell 23 percent to ￥46.5 billion. Guidance for the division is now lower, at ￥130 billion for the current fiscal year, from October’s forecast of ￥140 billion.
“We are cautious, but not overly worried about CMOS despite iPhone weakness,” Jefferies LLC analyst Atul Goyal wrote in a report last week.
The company’s new 48-megapixel image sensor is proving to be a hit with manufacturers including Xiaomi Corp (小米) and Huawei Technologies Inc (華為), who are promoting it as a key feature in their new models.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
‘FAILED EXPORT CONTROLS’: Jensen Huang said that Washington should maximize the speed of AI diffusion, because not doing so would give competitors an advantage Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) yesterday criticized the US government’s restrictions on exports of artificial intelligence (AI) chips to China, saying that the policy was a failure and would only spur China to accelerate AI development. The export controls gave China the spirit, motivation and government support to accelerate AI development, Huang told reporters at the Computex trade show in Taipei. The competition in China is already intense, given its strong software capabilities, extensive technology ecosystems and work efficiency, he said. “All in all, the export controls were a failure. The facts would suggest it,” he said. “The US
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
French President Emmanuel Macron has expressed gratitude to Hon Hai Precision Industry Co (鴻海精密) for its plan to invest approximately 250 million euros (US$278 million) in a joint venture in France focused on the semiconductor and space industries. On his official X account on Tuesday, Macron thanked Hon Hai, also known globally as Foxconn Technology Group (富士康科技集團), for its investment projects announced at Choose France, a flagship economic summit held on Monday to attract foreign investment. In the post, Macron included a GIF displaying the national flag of the Republic of China (Taiwan), as he did for other foreign investors, including China-based
RSS