TOKYO (CNA) – Sony Group Corp yesterday said it is examining a partial spin off of its financial business just three years after taking full control, as the conglomerate doubles down on entertainment and image sensors.
Sony said it is considering a time frame of two to three years to spin off Sony Financial Group – whose operations include life insurance and banking – with a eye to listing the business and retaining a stake of slightly under 20 per cent.
Given the capital the business requires, “it is a challenge to balance this with our investment in other growth areas such as entertainment and image sensors”, Sony chief financial officer Hiroki Totoki told a strategy briefing. The conglomerate is pursuing synergies between its business lines, which include video games, music and movies.
It said hit drama The Last of Us on television network HBO drove uptake of the game franchise on which it is based and the music used.
A partial spin-off of Sony Financial, which the group said was made possible by changes in tax rules, would allow the newly listed business to retain Sony branding.
The finance business reported a five per cent fall in revenue to JPY1.45 trillion (USD10.74 billion) in the year ended March. Operating profit rose 49 per cent to JPY223.9 billion helped by a one-off gain from a real estate sale.
In the current financial year, Sony expects a 40-per-cent drop in revenue at the unit due to an accounting change, and a 20 per cent drop in profit due to the absence of the year prior’s one-off gains.
Sony share price was up six per cent in Tokyo morning trade, a day after the group said it would buy back up to 2.03 per cent of its stock.
Sony has said it expects to sell 25 million PlayStation 5 consoles this financial year as supply chain snarls ease. That would be a record for any PlayStation device.
However it has also forecast a slide in first-party software sales, reflecting weakness in the games pipeline. A sequel to Sony’s hit Marvel’s Spider-Man is among games due for release this year.
Rival Nintendo, whose Switch console has an install base of more than 125 million units, sold over 10 million copies of The Legend of Zelda: Tears of the Kingdom during the first three days from launch.
It has also scored a monster hit with The Super Mario Bros Movie.
Sony Chief Eexecutive Officer Kenichiro Yoshida said he recently watched the movie in Tokyo and used to play Super Mario too.
