Sony Forecasts Flat Profit as U.S. Tariffs Impact Outlook
TOKYO, May 14, 2025 – Sony Group Corporation announced on Wednesday that it anticipates a nearly flat operating profit for the fiscal year ending March 2026, projecting a modest 0.3% increase to ¥1.28 trillion ($8.7 billion). This underwhelming forecast is primarily due to a ¥100 billion ($700 million) hit from U.S. tariffs imposed by President Donald Trump, which are expected to offset anticipated gains in its gaming, music, and movie businesses.
The Japanese conglomerate reported a robust performance for the fiscal year ended March 31, 2025, with net income attributable to stockholders rising 18% to ¥1.142 trillion ($7.76 billion), surpassing analyst expectations. Operating profit, including financial services, grew 16% to ¥1.4 trillion. However, the company cautioned that the tariff burden could erase projected profit growth for the current year, even as it pursues strategies to mitigate the impact, such as price increases for its products, including PlayStation consoles.
Sony’s gaming division, a significant revenue driver, faced challenges in the fourth quarter, with PlayStation 5 sales dropping 38% year-over-year to 2.8 million units, leading to a 12.5% decline in operating profit for the unit. Despite this, Sony expects a 16% profit increase in the gaming segment this year, driven by stronger sales of first-party games. The U.S., a key market for PlayStation, is heavily affected by tariffs, as most consoles are manufactured in China.
The company also highlighted uncertainties surrounding the tariff impact, noting that its estimates do not account for a recent U.S.-China trade deal announced this week. Sony is actively exploring responses to the tariffs, with Chief Executive Officer Hiroki Totoki emphasizing the need for agility in navigating the evolving trade landscape.
In addition to its financial outlook, Sony announced a ¥250 billion ($1.7 billion) stock buyback program and provided updates on the partial spin-off of its financial services business, set to occur in October 2025. The spin-off will reduce Sony’s stake to less than 20%, allowing the company to focus on its core entertainment and technology segments.
Sony’s stock has seen gains over the past year, fueled by optimism about its entertainment businesses, but recent tariff concerns have tempered investor sentiment. The company’s forecast fell short of analyst expectations of ¥1.5 trillion in operating profit, reflecting the significant challenges posed by global trade disruptions.
As Sony navigates this tariff-driven uncertainty, it remains focused on leveraging its strengths in gaming, music, and movies to sustain growth, while adapting to a rapidly changing global trade environment.
