Sony is reaping the rewards of a restructuring which has shifted its focus to the gaming sector, notably VR, as well as its entertainment business.
Following a string of disappointing years earlier this decade, Sony’s need to curtail its dependence on computers, televisions and mobile phones became apparent. Over the past few years, the Japanese conglomerate has shifted its focus to smaller-scale products such as camera sensors, consoles and video games, and realigned its entertainment business. These strategies appear to be paying off, as Sony reported marked increases in revenue and net profit in the second quarter.
One of Sony’s biggest successes was in the gaming sector – specifically its PlayStation 4 video game console and PlayStation VR, sales of which were a key factor in the strong results. The PlayStation VR, a virtual reality headset, has been especially popular, with Sony emerging as a leader in the VR market. Buoyed by sales in these areas, net profit surged to 80.8 billion yen, about $732 million, from 21.2 billion yen in 2016. Revenues rose more than 15% over last year.
Sony Pictures Entertainment, an American subsidiary of Sony Entertainment, has also contributed, with popular television series like “Better Call Saul” and “The Last Tycoon”, the New York Times reports. A turnaround could be afoot for Sony’s entertainment business, which in recent years has had to contend with write-downs from movie flops, as well as a high-profile cyber-attack. Last year, more than 90% of the entertainment company’s overall income came from Sony Pictures Television.
A renewed emphasis on television became especially apparent in May, when Sony hired Tony Vinciquerra, a former CEO of Fox Networks Group with a long track record in television, as Chairman and CEO of Sony Pictures Entertainment. In the executive recruiting process, Sony had also considered Peter Rice, Chairman of Fox Networks Group, and Andy Bird, Chairman of Walt Disney International.
Yet another high performer for Sony is its semiconductor segment, which increased sales 41% this year, largely on the strength of demand for its image sensors, used in mobile devices. In addition, Sony’s home entertainment unit saw improved sales of higher-end televisions.
Sony suffered losses in 2016 due to earthquakes in Japan, which tempers year-on-year comparisons; however those losses were offset some by insurance claims and the sale of a manufacturing subsidiary of Sony’s camera business.