(Reuters) – Japan’s Sony Corp (6758.T) on Tuesday reported a 1.1% decline in first-quarter operating profit, much milder than market estimates as its gaming business thrived while consumers locked down at home looked for entertainment and downloaded more games.
The electronics and entertainment firm posted April-June profit of 228.4 billion yen ($2.15 billion), versus 230.9 billion yen a year prior.
The result compared with the 143.21 billion yen average of 10 analyst estimates compiled by Refinitiv.
The firm also forecast profit to fall 26.7% to 620 billion yen in the year through March 2021, its lowest in four years, but better than a drop of at least 30% it estimated in May.
The impact of the novel coronavirus on Sony has been limited compared with Japanese electronics peers such as Panasonic Corp (6752.T) due to its pursuit of recurring revenue such as subscription fees on gaming content.
To accelerate the portfolio shift to such revenue streams, Sony recently invested in Chinese video site Bilibili Inc (BILI.O) and Epic Games, creator of the popular video game Fortnite.
Sony forecast its gaming business to post a profit of 240 billion yen for this financial year, versus 238 billion yen a year earlier, driven by a sharp rise in software sales.
The firm is scheduled to launch its PlayStation 5 console during the year-end holiday shopping season, seven years after its previous-generation games console.
It expects its image sensor business, which supplies camera sensors to global smartphone makers including Apple Inc (AAPL.O) and Huawei Technologies Co Ltd [HWT.UL], to report profit of 130 billion yen, compared with 235.6 billion yen a year earlier.
The worldwide smartphone market is forecast to decline 12% year over year in 2020, according to researcher IDC, even though the impact of the shrinking market on Sony would be partially offset by smartphone makers’ adoption of multiple-lens cameras.