Sony Earnings – Powered by PlayStation but Mobile Phone Business Struggling
Today Sony (NYSE:SNE) released its 1Q fiscal year 2018 results for the period April – June and it posted overall positive results. Sony is fresh off a very strong fiscal 2017 year that saw the company rake in record levels of operating profit. The quarter also coincides with the first quarter under new CEO Kenichiro Yoshida.
The first quarter of the fiscal year 2018 is greatly improved from the year-ago quarter, almost entirely from the powerful Gaming division. PlayStation continues to surge in both hardware and software sales and we will dive into the numbers below.
- 2018 Q1 net income of $2.08 billion up from $742 million a year ago, a 180% increase
- 2018 Q1 revenue of $17.9 billion up from $70.39 billion a year ago, a 5% increase
- Game (PlayStation) division soars 36% year-over-year, $4.33 billion in sales
- Mobile division continues to post lower and lower handset sales numbers
Sony is a conglomerate in every sense of the word and its multiple segments each have a unique story.
First, an overall look at how Sony divides its major product lines and groups.
Game & Network Services (PlayStation) – Strong growth (+36%) on the back of God of War and other software sales
- 3.2 million PS4’s sold in the quarter, total 82 million units installed worldwide
- 40 million PS4 games sold in the quarter
We can announce that the grand total of PS4’s sold to date to is now over 82 million units and will soon surpass the PlayStation 3 in installed units worldwide. This means Sony is able to enjoy success as the world’s #1 console video game platform. The group saw sales that spiked 36% despite the system nearing its 5th year of age. Sony executives cited God of War as driving profits for the group and say that first-party exclusive titles will continue to drive Game and Network group numbers for the foreseeable future.
Game and Network Services booked over $4 billion in revenue for the first quarter of the fiscal year 2018.
The “network services” portion of the group would be PlayStation Plus, a premium paid-for subscription service that more and more PS owners are signing up for. Digital sales and subscription revenue were cited as key drivers for the gaming divisions performance.
The forecast for the division is slightly up as Sony has revised system hardware sale forecasts based on recent surges in demand. Its clear PlayStation will be the engine powering Sony to a sustainable and profitable future for the time being.