Sony lifts profit forecast as games business shines

By Sam Nussey

TOKYO (Reuters) -Sony on Thursday raised its operating profit forecast for the year ending in March by 2% to 1.34 trillion yen ($8.70 billion) as it reported strong growth at its key gaming unit.

Once best known for consumer electronics such as the Walkman, Sony's business spans games, movies, music and image sensors.

Profit at the gaming business grew 37% in the October-December quarter, driven by higher sales including from network services and reduced losses from hardware.

The company's shares closed up 1% ahead of earnings and are up 1% year-to-date after touching highs last week.

President Hiroki Totoki is strengthening his grip over the Japanese technology and entertainment conglomerate, taking the CEO role from April.

Totoki has served as finance chief and took executive roles at the games unit.

Sony sold 9.5 million PlayStation 5 units during the quarter, compared to 8.2 million units a year earlier.

Totoki said he expected forthcoming titles to support the games business in the coming fiscal year.

Anticipated games include Grand Theft Auto VI, which Take-Two Interactive Software last week reiterated would launch this autumn.

In-house title Ghost of Yotei is also set to launch this year and follows the success of Ghost of Tsushima which has sold 13 million units across PlayStation and PC.

Monthly active users on PlayStation Network grew more than 10% to 129 million users compared to three months earlier.

The network was recently disrupted by a global outage.

Sony's music unit's profits were also boosted by higher revenue from streaming services.

Group profit in the third quarter was 469.3 billion yen, up 1% on a year earlier and beating analysts' estimates.

Sony posted flat operating profit at the unit that makes hardware such as cameras following lower sales of televisions.

The conglomerate agreed to invest in media powerhouse Kadokawa last year as it expands in entertainment.

Sony said it would buy back up to 30 million shares for some 50 billion yen.

($1 = 153.9700 yen)

(Reporting by Sam Nussey; Editing by Muralikumar Anantharaman, Christopher Cushing and Alexandra Hudson)