Japanese electronics giant Sony on Friday forecast a 13 percent rise in net profit for the year to next March, boosted by its video games operations.
The projection of a 1.2 trillion yen ($7.7 billion) profit, slightly lower than the market's expectation, came as the firm revealed that net income fell three percent to 1.0 trillion yen in the 2025-26 fiscal year.
Revenue rose four percent to 12.5 trillion yen and operating income climbed 13 percent to 1.5 trillion yen, it said in a statement.
Sony projected revenue for the 2026-27 fiscal year of 12.3 trillion yen and said operating income would rise to 1.6 trillion yen.
The company also announced a plan to buy back its own shares worth up to 500 billion yen.
For the previous business year, Sony said its game division benefited from foreign exchange movements and increased sales from network services but saw falling hardware sales.
The company sold 16 million PlayStation 5 units in the past fiscal year, down from 18.5 million in the previous 12 months.
"Even though costs to streamline risk assets and strengthen the business foundation increased, business performance remained solid," it said in the statement, reviewing its performance in the last fiscal year.
For the ongoing business year to March 2027, Sony remains in a strong position to further reap the fruits of the PlayStation 5 game console with smash-hit game titles in the pipeline, particularly "Grand Theft Auto VI", due in November, analysts said.
"If there is a game that can sell PlayStations by the millions, it is this one," Serkan Toto of Kantan Games Inc told AFP.
"Revenue will not only come in from the game's sales itself but subsequently from microtransactions and network subscriptions for GTA Online, too.
"Sony can also look forward to September when 'Marvel's Wolverine' launches, its next first-party blockbuster," he said.
Sony reiterated that it did not expect to struggle to secure enough chips to produce PS5 hardware, despite the global competition for semiconductors to support artificial intelligence technologies.
For the year to March 2027, the game division is expected to enjoy higher profits despite falling sales, Sony said.
"Sony's more mature PS5 console cycle leaves it better placed to weather higher memory costs," said Amir Anvarzadeh, strategist at Asymmetric Advisors.
"The maturity of its console cycle also puts Sony in a uniquely strong position to capture the massive revenue potential of Take-Two's (Grand Theft Auto VI)...which we view as the key driver for PlayStation earnings.
"Having already moved past the heavy hardware penetration costs typical of earlier years, Sony's bottom line stands to benefit significantly from the high-margin software sales and ecosystem engagement this launch should trigger," Anvarzadeh said.
