Record PS5 Sales Lift Sony’s Holiday Quarter as Pictures Segment Slumps to $179 Million

Hiroki Totoki, Sony’s CFO since 2013, is also taking on the role of president and chief operating officer on April 1

Sony Earnings
Photo illustration by TheWrap

Sony’s entertainment businesses wobbled in the recent quarter, with its film, TV and music businesses comparatively dragging down the media and electronics conglomerate’s performance, offset by a lift from its gaming segment.

A weaker yen against the dollar was also a contributing factor toward increased profits, with Sony using an exchange rate of 141.7 yen to the dollar.

Sony Pictures reported profits of $179 million in the third quarter of its fiscal year, which ends in March, reflecting its performance from October to December. It reported an operating income of $3.33 billion (¥428.7 billion), which was down 8%, as underwhelming performances from Sony Pictures was balanced out by strong figures from gaming.

Quarterly revenue at the pictures division fell 42% to $2.35 billion from $4.06 billion, even with an assist from the acquisitions of Bad Wolf and Industrial Media.

This time last year, Sony Pictures reported $1.31 billion profit for the third quarter of 2021, up from $194 million the same quarter in 2020. That massive upswing was mostly due to three very specific and unlikely-to-be-replicated events. “Spider-Man: No Way Home” opened in December 2021 and eventually grossed $1.91 billion worldwide in theatrical revenue alone, while the sale of the Game Show Network to Scopely netted another $1 billion. Meanwhile, Sony convinced Netflix to shell out $500 million in a five-year syndication deal for “Seinfeld.” 

Sony didn’t pull out any similar surprises this year, making for a more routine announcement.

While the second quarter of 2022 offered up theatrical hits like “Where the Crawdads Sing,” “Bullet Train” and “The Woman King,” the final months of 2022 saw only smaller performers like “Lyle, Lyle Crocodile,” “Devotion” and the slow rollout of Tom Hanks’ “A Man Called Otto.”

“Devotion,” J.D. Dillard’s Korean War drama, starring Jonathan Majors and Glenn Powell, ended up on Paramount+ after its theatrical release, which highlights Sony’s position as a studio without its own in-house streaming service, free to license to other players.

Thanks to those arrangements, including a lucrative pay-TV first-window deal with Netflix signed in April 2021, the conglomerate is less affected by Wall Street’s fickleness toward Hollywood’s direct-to-consumer players. With all due respect to Crackle, which Sony sold off in 2019 to CSS Entertainment, Sony has mostly remained on the sidelines licensing content to other streaming platforms. As a result, it has avoided becoming a casualty of the streaming wars by instead selling the guns. 

Sony has made some smaller bets on streaming, including its acquisition of Crunchyroll in August 2021, which along with Funimation has made it a major player in a growing anime empire. 

Its games and network services division, which includes its vital PlayStation franchise, increased its revenue by 53% and its profit in the quarter 25% to $180 million, partially thanks to selling a record 7.1 million PlayStation 3 units as the hangover of pandemic supply chain problems eased.

Music profit increased 14% in the latest quarter to $490 million on revenue of $2.83 billion. Their biggest titles were Harry Styles’s “Harry’s House” and Beyonce’s “Renaissance.”  

Sony Group also announced that CFO Hiroki Totoki, 58, would succeed Kenichiro Yoshida, 63, as group president and chief operating officer. Yoshida will remain CEO and chairman. Totoki will retain the title of CFO as well.

“Together with Mr. Yoshida, the Sony Group’s management team, and our employees around the world, I would like to create a positive spiral that begins with Sony being chosen by customers, which then energizes our employees, enables us to attract more new talent, increases our corporate value, and ultimately enables us to give back to society,” said Totoki of his appointment.