The Zhitong Finance App learned that due to the continued growth of high-profit content assets, Sony (SONY.US) announced better-than-expected results for the first fiscal quarter of fiscal year 2026 and raised profit expectations for the full year, highlighting the resilience faced by the entertainment group under upward pressure from component prices.
According to financial reports, Sony's first fiscal quarter sales increased 8% year over year to 2837.8 billion yen, which was 120.3 billion yen higher than analysts' general expectations; operating profit was 476.5 billion yen, a sharp increase of 40% year over year, far higher than the moderate growth level generally expected by analysts; net profit attributable to shareholders was 342.2 billion yen, up 32% year on year; and diluted earnings per share were 57.82 yen.
By business, Sony's gaming and network services business (G&NS) sales were 937.1 billion yen, music business sales were 562 billion yen, video and television business sales were 315.1 billion yen, entertainment, technology and service business (ET&S) sales were 543.9 billion yen, and imaging and sensing solutions business (I&SS) sales were 512.7 billion yen.
Sony currently predicts that operating profit for the full year of the 2026 fiscal year will reach 1.72 trillion yen, which is higher than analysts' average expectations and higher than the 1.6 trillion yen target previously set.
Sony said that many of its business divisions have benefited from the positive impact of the weakening yen. The company also said that getting a refund of the tariffs imposed by the US last year is helping its gaming business and is a key factor driving the company's profit expectations — game console products, including PlayStation 5, are particularly vulnerable to a series of tariff policies implemented by the Trump administration starting with the “Liberation Day” tariff measures in April last year.
At the same time, Sony has been adjusting the direction of resource allocation in recent years, shifting the focus to the accumulation of entertainment assets such as music, games, movies, and animation, while cutting back on the consumer electronics business with low profit margins. Well-known IPs such as “Spider-Man” under Sony continue to bring huge returns, while its music business — which owns several record brands including Columbia Records and RCA Records — continues to benefit from the growth of streaming services. Sony said that sales in the music business increased 21% year over year in the first fiscal quarter, clearly ahead of the game business, where sales “remained essentially unchanged.”
In terms of hardware business, Sony's imaging and sensing solutions business is being affected by the weakness of the smartphone market. Rising memory chip prices are squeezing the profit margins of the PS5 console business, but upcoming new games, including Marvel's “Wolverine” and “Grand Theft Auto 6,” are expected to drive growth.
However, as artificial intelligence (AI) services lower the threshold for content creation, compete for consumer attention, and may weaken the value of Sony's own IP, the company is still facing increasing pressure. Sony said AI will enhance the company's business capabilities by helping artists create more entertainment content that can be commercialized in multiple business areas within the group. The company has developed a range of in-house AI technologies, including AI-driven sound search tools and audio generation tools. Sony says these technologies can simplify the production process of movies, videos, and games.
Additionally, Sony is cutting its consumer electronics product lineup to focus on areas with the most potential for growth. Earlier this week, Sony revealed that it had submitted a non-binding acquisition proposal to lens manufacturer Tamron Co., Ltd. If successful, the deal will further expand the Sony Alpha camera series through Tamron's extensive and more competitively priced interchangeable lens product portfolio.