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In the face of a global shortage of semiconductors, Japanese electronics and media giant Sony Corp raised its full-year profit outlook by one-third and said it was struggling to keep up with pandemic-fuelled demand for the new PlayStation 5.
Sony, which launched the PS5 in November in the core markets, said it expected to sell more than 7.6 million consoles by the end of March on Wednesday.
PS5, which sells for as much as $500, quickly sold out due to the pent-up demand for videogames from people stuck at home due to coronavirus lockdowns after its launch on online retail sites in the United States and Japan.
It is also expected that the shift to the new games console will encourage gamers to move to online downloads or subscription services, helping Sony to boost its gaming unit’s profitability.
But Sony warned that due to the chip shortage that has hurt output from companies ranging from smartphone manufacturers to car companies, it was struggling to match demand.
“In the face of a shortage of semiconductors and other components, it is difficult for us to increase PS5 production,” Chief Financial Officer Hiroki Totoki said at a press briefing.
In the 12 months through March, Sony now expects 940 billion yen ($8.95 billion) in operating profit, compared to the 700 billion yen previously expected.
Totoki also said that, as of late October, Sony had resumed some shipments of sensors to customers in China.
Following U.S. restrictions on the sales of chips using U.S. technology to Chinese smartphone manufacturer Huawei Technologies Co Ltd., Sony was concerned about the potential impact on its sensor business. Huawei revealed plans to sell its budget-brand smartphone manufacturer, Honor, in November. Last month, after the spin-off, Honor said it had signed deals with suppliers of chips and component makers, including Sony. After Apple Inc, Huawei was Sony’s second-largest image sensor customer, accounting, according to analysts, for about a fifth of its $10 billion in sensor revenue. Honor said last month that it had signed deals with chip suppliers and component makers, including Sony, after the spin-off. After Apple Inc, Huawei was Sony’s second-largest image sensor customer, accounting for about a fifth of its sensor revenue of $10 billion, according to analysts.
For the quarter of October-December, Sony’s third-quarter operating profit jumped 20 percent to 359.2 billion yen from a year ago, sailing past a consensus estimate of 179 billion yen from six analysts surveyed by Refinitiv.
Sony, historically better known for hardware such as the Walkman music player and TVs, has invested heavily in strengthening its entertainment content and distribution business in recent years.
Sony is streamlining its consumer electronics business at the same time, with plans to close a factory in Malaysia this year that manufactures home audio equipment, headphones, and other products.
