In recent years, Sony employed myriad strategies to restore profitability – restructurings, asset sales, mass layoffs and increased productivity. Only now is the Japan Inc icon realizing what was missing: a pandemic.
But 2020’s shelter-at-home zeitgeist has provided an unexpected tailwind for a company that long ago lost its innovative mojo. Sony expects a 37% jump in full-year net profits in the fiscal year ending March 2021.
The reason is a massive Covid-19 boost to gaming revenues.
Chief Financial Officer Hiroki Totoki is telegraphing a net-profit jump to US$7.6 billion, aided by a 3% revenue jump in revenues to $81 billion.
This gaming boom is helping Sony offset painful losses elsewhere. Its image sensor line, typically a key profit center, is lagging as smartphone sales lose momentum amid lockdowns and job-security concerns. Suddenly, Sony’s impressive 50% of the global sensor market share has become a liability.
The US-China trade war has been another nightmare. US President Donald Trump’s assault on Huawei Technologies, one of the globe’s biggest smartphone makers, puts roughly one-fifth of Sony’s image-sensor sales in harm’s way.