Sony has logged its first record full-year operating profit in two decades as the electronics and media giant's shift to an online content distribution model for gaming bears fruit.
The Japanese company on Friday reported a 734.9 billion yen ($6.73 billion) profit for the year ended March 31, two and a half times the fiscal 2016 level. Net profit nearly septupled to 490.8 billion yen for the first record in 10 years.
Sales increased 12% to 8.54 trillion yen, with gains concentrated in such content businesses as video games, music and movies. The top line also benefited from a shift toward high-value-added products in television and digital camera operations. Higher sales of image sensors for smartphones lifted business in semiconductor operations.
These figures show Sony back at the top of its game, having fought its way out of a historic earnings crunch early this decade. Its challenge now is to achieve earnings on this scale on a continuous basis, Chief Financial Officer Hiroki Totoki said in a Friday news conference. The company has never managed to keep operating profit north of 500 billion yen for long, he said.
Online content distribution is now Sony's most promising earner, according to President Kenichiro Yoshida. The game and network services segment brought in a 177.5 billion yen operating profit for fiscal 2017, contributing 24% of the overall figure. The tally is seen rising 7% to 190 billion yen this fiscal year, even with sales of the PlayStation 4 console apparently having peaked.
Indeed, this division is a symbol of all that has changed at Sony over the past 20 years. When the company last logged record profit, in fiscal 1997, the segment's fortunes followed every shift in console sales. Now, its profit structure is far more resilient to a slump in that arena. Network sales, including subscriptions to the PlayStation Plus online multiplayer gaming service that run around 5,000 yen a year, topped 1 trillion yen for the first time last fiscal year. The operations "are structured so as not to be swayed by the ups and downs of the hardware business," said Yu Okazaki of Nomura Securities.
