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Sony hikes profit forecasts after strong quarter for games
Sony hikes profit forecasts after strong quarter for games
By Katie Forster and Kyoko Hasegawa
Tokyo (AFP) Aug 7, 2025

PlayStation-maker Sony raised its annual profit forecasts on Thursday, citing strong performance in its key gaming business and a smaller-than-expected negative impact of US trade tariffs.

The Japanese electronics and entertainment conglomerate said "user engagement continued its strong momentum" in the video game sector.

Its shares surged more than six percent in Tokyo after the announcement.

Monthly active users in June and total gameplay hours on PlayStation consoles in the April-June quarter both increased six percent year-on-year, it said.

It added that "the situation surrounding the additional US tariffs is still fluid, and we intend to continue to monitor it and take action to minimise its impact".

"The impact of the additional US tariffs on operating income is estimated to be approximately 70 billion yen ($470 million), a decrease of 30 billion yen from the previous forecast."

The company hiked its net profit forecast for the current 2025-26 financial year to 970 billion yen ($6.6 billion), up from the previous estimate of 930 billion yen.

But even the higher forecast would not top the record net profit of 1.1 trillion yen that Sony logged in the previous financial year.

Atul Goyal, an equity analyst at Jefferies, said ahead of the earnings release that the massively anticipated global release of the game "Grand Theft Auto VI" in May 2026 "could lead to peak game profits" for Sony.

GTA VI, which will be released on the PlayStation 5 and Microsoft's XBox, will be set in Miami-like Vice City and features a playable female protagonist for the first time.

The PlayStation 5, which launched in 2020, is entering a "late" stage of the usual lifecycle for a console, Goyal said.

"Sony's outlook hinges on navigating tariff headwinds near-term, leveraging GTA6's blockbuster potential... and cyclical console risks," he said.

"A sensors spin-off could transform valuation, while music provides steady growth and pictures provides stability."

Music streaming is an important business pillar for Sony, which has an impressive back catalogue and a current roster that includes artists such as Beyonce and Lil Nas X.

The Japanese giant, which saw net profit jump 23 percent on-year in this year's April-June quarter, also raised its operating profit forecast on Thursday.

Sony last month said it had bought a strategic 2.5 percent stake in Japanese game franchise giant Bandai Namco, which owns "Gundam" and arcade classic "Pac-Man", with a view to growing its anime business.

With the 68 billion yen transaction, the companies plan "to create new and emotionally moving experiences for fans", they said in a joint statement.

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