sony plans to buy back 200 billion Japanese yen ($1.54 billion) of shares as the company announced that its operating profit had more than doubled thanks in large part to its PlayStation games division.
The Japanese giant plans to complete the share buyback between May 11, 2022 and May 10, 2023, it said, as it announced operating profit for the March quarter reached 138, 6 billion yen ($1.06 billion).
This was driven by continued strong sales of its PlayStation 5 console and games.
Operating profit for Sony’s games division increased 175% year-on-year in the March quarter. The company sold 11.5 million units of its flagship PlayStation 5 in the fiscal year ended March 31, up from 7.8 million the previous year.
Sony Chief Financial Officer Hiroki Totoki said the company expects sales of 18 million PlayStation 5 units in the current fiscal year ending March 2023. That would represent a 56% increase from one year to the next.
This is in contrast to its rival nintendo which on Tuesday said it expects sales of its Switch console to drop 9% in the current fiscal year due to component supply issues for its devices.
Totoki, however, warned on a call with analysts that lockdowns to deal with Covid-19 in China could limit the company’s ability to source parts.
Sony expects the games division’s operating profit for the current fiscal year to fall by around 12%. The company said there would be an increase in game development costs and it would incur expenses if its proposed $3.6 billion acquisition of Destiny and Halo maker Bungie goes through.
The Tokyo, Japan-based company has also seen success with its cinema division. “Spider-Man: No Way Home” helped Sony’s stills business turn a profit in the March quarter.
Totoki issued a note of caution on the state of the global economy.
“With the situation in Ukraine and Russia and the slowing global economy resulting from rapid inflation, we expect the demand environment for this fiscal year to be even more severe than in recent years,” he said. said Sony’s chief financial officer.