Sony Music and Games Q2 Growth Helped Offset Losses in Movies and TV

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Revenues for Sony’s music and games division saw growth in the second quarter of 2021, but the company is still struggling with pandemic-related troubles for its pictures division, company executives said in an earnings call Thursday morning.

Sony Pictures fiscal second-quarter profit dipped to 31.6 billion yen($278 million), a decline of 3.7 percent from the same period a year ago when its profit amounted $299 million. On the bright side, revenue was up in the pictures unit, rising 35 percent in U.S. dollars to $612 million.

The Q2 earnings results were presented on the call by executive deputy president and chief financial officer Hiroki Totoki; senior vice president in charge of corporate planning and control, finance and IR Naomi Matsuoka; and Hirotoshi Korenaga, who serves as senior vice president in charge of accounting.

Totoki called Playstation’s “Ghost of Tsushima” game a “big hit” and said games overall continue to benefit from stay-at-home pandemic behavior. He added that music streaming revenue continues to grow at a high rate, “exceeding our expectations.”

Totoki attributed the pictures segment profit decline to COVID-delayed theatrical releases as well as production. He said that the fallout from such delays would have a domino effect for multiple years as not only the theatrical window but the subsequent home entertainment windows are also delayed.

Said Totoki, “We have restarted motion picture and TV show production in stages since July. Box office revenue has begun to recover. But the closure of theaters n major cities in the US continues, and the major studios are postponing the release of large films. Once theaters reopen, there is a possibility that increased competition from a crowded motion picture release schedule will cause the recovery of ourselves and profit to be delayed. The motion picture business model is one where sales and profit are generated over multiple years.”

In Q1, despite a slow recovery in some divisions due to pandemic concerns, Sony Group saw a record increase in profits of 9% in the period between April and June of 2021, the company reported Wednesday. During the period, which represents the first quarter of Sony’s financial year, Sony Group sales hit 2.25 trillion yen or $20.5 billion, a gain of 15%.

Led by robust PlayStation sales, Sony’s Game & Network Services division posted the highest revenue for the company in Q1, bringing in approximately $5.6 billion. Sony’s music division helped fuel profits in Q1. The division’s revenue increased 44%, driven by growth in streaming, including paid subscription streaming service and ad-supported music streaming.

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