* Q2 profit 317.76 bln yen vs 197.55 bln yen consensus
* Raises annual profit forecast to 700 bln yen
* Cuts outlook for image sensor biz after U.S. curbs on
* Targets PlayStation 5 sales of 7.6 mln units or more
TOKYO, Oct 28 (Reuters) - Sony Corp raised its
annual profit outlook on Wednesday after posting a record
second-quarter profit, as its gaming business continued to
capture "nesting" demand ahead of the launch of the
next-generation PlayStation 5 (PS5) console next month.
The upward revision also reflects a robust start for
Japanese animated film "Demon Slayer", co-distributed by Sony's
music unit, which has been shattering box-office records in
Japan since its Oct. 16 release.
Higher revenue from gaming and entertainment content gives
validation to Chief Executive Kenichiro Yoshida's strategy to
increase recurring revenue streams that cushion the impact of
volatile hardware sales cycles.
Sony is targeting PS5 console sales of 7.6 million units or
more in the year through March, chief financial officer Hiroki
Totoki said at a briefing, citing the sales achieved for the PS4
when it was launched seven years ago.
But Totoki also warned of major damage to its prized image
sensor business from tighter U.S. curbs on Huawei Technologies
Co Ltd, which banned global suppliers from selling it
chips - such as Sony's - made using U.S. technology without a
The Chinese smartphone maker was Sony's second-largest
image sensor customer after Apple Inc, accounting for
about 20% of its $10 billion in sensor revenue, according to
Despite efforts to diversify customers, a full recovery in
profitability at the image sensor business would come only in
the year through March 2023, Totoki said.
"It will take considerable time until other customers adopt
the trend of high-performance, large-sized sensors led by the
Chinese customer," he said.
Sony raised its annual profit forecast by 13% to 700 billion
yen ($6.7 billion), after reporting a surprise increase in
July-September profit to 317.76 billion yen, a second-quarter
The outlook is above the 672.33 billion yen consensus of 24
analysts compiled by Refinitiv.
The firm now forecasts its gaming division will post an
annual profit of 300 billion yen, up from the previously
estimated 240 billion yen.
Consumers' shift to gaming software downloads and online
subscription services during coronavirus lockdowns boosted
profits despite the PlayStation 4 console coming to the end of
Such high-margin online revenue is likely to help Sony's
gaming business stay profitable this year, outweighing massive
marketing and production costs associated with the new console
Sony pre-sold as many PS5 consoles in the first 12 hours in
the United States as in the first 12 weeks for its predecessor
PlayStation 4 device, Jim Ryan, CEO of Sony Interactive
Entertainment, said in an interview.
"The demand as expressed by the level of pre-order has been
very, very considerable," Ryan told Reuters.
For its sensor business, Sony cut the profit outlook by 38%
to 81 billion yen, further trimmed its three-year investment
through March next year by 40 billion yen to 650 billion yen,
and said it may slow a production ramp-up at a new plant in
Nagasaki, southern Japan.
($1 = 104.7000 yen)
(Reporting by Makiko Yamazaki; Editing by Christopher Cushing
and Kim Coghill)