Sony reported a 7% decrease in operating profit for the fiscal year 2023, mainly due to PlayStation 5 (PS5) sales not meeting the revised target.

Financial Overview: Sony's annual revenue in 2023 reached 13 trillion yen, a year-on-year increase of 19%. However, its operating profit was 1.2 trillion yen, a year-on-year decrease of 7%. In addition, Sony's revenue in the first quarter of this year was 3.5 trillion yen, higher than the expected 2.89 trillion yen and a year-on-year increase of 14%. But the operating profit for the quarter was 229.4 billion yen, lower than the expected 236.81 billion yen, despite still achieving a 57% year-on-year increase.

Sales of PS5: Sony's flagship product PS5 sold 20.8 million units in the 2023 fiscal year, slightly lower than the previous target of 21 million units. The company expects that the sales of PS5 will further decrease to 18 million units in the fiscal year ending in March 2025.

Management changes: Sony has made management adjustments in its Sony Interactive Entertainment division, elevating interim CEO Hiroki Totoki to the position of Chairman of the business and appointing Hideaki Nishino and Hermen Hulst as CEOs of the newly established Platform Business Group and Studio Business Group, respectively.

The impact of the financial sector on profits: Sony stated that its financial services department was the main sector dragging down the decline in profits, with operating revenue of 173.6 billion yen in 2023, a year-on-year decrease of 22.5%. Meanwhile, Sony's Imaging and Sensing Solutions (I&SS) business's operating revenue also decreased by 9% from 193.5 billion yen in 2022 to 17.5 billion yen.