Sony on Wednesday announced its financial results for the quarter ended March with the company posting operating profits of 35.45 billion yen (US$331 million). The operating profits represent a 57% decrease from the prior year quarter while its overall revenue decreased 18% to 1.75 trillion yen. The company said that the COVID-19 situation has had an impact on several segments that Sony operates including music and pictures. Hiroki Totoki, CFO of Sony provided further breakdown of COVID-19 impact on Sony in the earnings call with Totoki highlighting the television business has faced a major impact in countries like India.
Sony Television Business Impacted in India
Sony said that the sale of its electronics products which includes TVs, smartphones and digital cameras would be impacted across the world due to the decrease in demand. The company said it lost around 35 billion yen as it faced supply shortage due to closure of factories in China and Malaysia. While the company hasn’t specified the number of TVs sold in India, Sony said that 1.4 million TVs were sold across the globe. In comparison, the company sold 2.1 million units in the prior year quarter. “Our Television business is being significantly impacted in areas like India and Vietnam, whereas scale is significant as well as in Europe,” Totoki said in the earnings call. Sony also reported a decrease in the sales of its Playstation, digital cameras and smartphones. The company sold 1.5 million PS4 units in the quarter ending March 2020 as compared to 2.6 million units in the prior year quarter. However, the company’s smartphone business registered a major hit with Sony managing to sell only 400,000 units in the quarter ending March as compared to 1.1 million units in the prior year quarter.
Sony Media Networks Braces for Decrease in Advertising Spending
Meanwhile, Sony reported an 13.6 billion year-on-year increase in its operating income primarily due to the channel portfolio review that Sony conducted on its Media Networks business in the previous fiscal year. In India, Sony shutdown Mix and Sony ESPN on March 31, 2020. Globally, Sony reduced its channel count from 82 as of March 31, 2019 to 74 on March 31, 2020. Sony highlighted that the new tariff order from the Telecom Regulatory Authority of India (Trai) had a negative impact on the company as its subscriber base decreased from 156 million to 115 million. Sony also said that its subscribers have subscribed to fewer channels with the introduction of the new tariff order that lets consumers select channels on a-la-carte basis. Crucially, Totoki said that the decrease in advertising spends would have an impact on its media business in India. “Due to the global reduction in advertising spending, advertising revenue in Media Networks is decreasing significantly, especially in India,” Totoki said.
