Sony Corp. expects the profitability of its games division to rise this fiscal year as the company prepares to launch a virtual reality headset to complement the PlayStation and streaming services.
The company is targeting an operating profit margin of 8 to 10 percent for its games and network services division in the year ending March 2018, up from 5 to 6 percent previously. It raised its target for revenue at that unit to between ¥1.8 trillion ($17.6 billion) and ¥1.9 trillion, up from ¥1.4 trillion to ¥1.6 trillion previously.
Since taking the helm four years ago, Kazuo Hirai has led Sony through a painful shift away from consumer electronics, cutting thousands of jobs and selling the company’s Vaio personal computer brand.
The focus on games, movies and network services has boosted profitability. Reflecting changing priorities, the company on Wednesday cut forecasts for sales and operating profit margin targets at its mobile and devices divisions.
The company has forecast profit at its games and network services business will rise 52 percent to ¥135 billion this fiscal year. Subscribers to its PlayStation Vue web-TV service have exceeded 100,000 since its March 2015 debut, people with knowledge of the matter have said.
Sony’s now looking to cement its lead over Microsoft Corp.’s Xbox One and Nintendo Co.’s Wii U consoles by launching a virtual reality headset in 2016. The $399 PlayStation VR will be available to the more than 36 million people who already own a PS4 when it goes on sale in October. The device may help convert more PS4 owners into video game subscribers who then pay monthly fees, said Jitendra Waral, a Bloomberg Intelligence analyst.
Sony had forecast sales of its PS4 consoles will climb 13 percent this fiscal year to 20 million units.
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