Sony Pictures Entertainment Sees Full-Year Profit Fall Without Franchise Film Launches

Sony Pictures Entertainment saw operating income dip by nearly $800M for the fiscal year to March 31, 2023, as a lack of tentpole franchise launches bit.

The Sony Corp-owned unit, which houses film, TV production and TV networks, reported operating income of 119.3 billion yen ($880M), down from 217.4 billion yen ($1.67B) last year. With no tentpole franchise launches in 2022, the fall was broadly expected.

Full year 2022 revenues did grow, standing at 1.37BN yen ($10B), compared with 1.24 billion yen the year prior — an increase of 10%. However, on U.S. dollar basis, there was an 8% drop, with Sony noting 2021 had benefitted from franchise titles such as Spider-Man: No Way Home and Venom: Let There Be Carnage.

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Licensing fees for TV also dipped, with Sony pointing to the absence of agreements akin to the 2021 licensing deals for Seinfeld and streaming deals for several feature films. However there was benfits from more series deliveries and the acquisitions of TV producers Industrial Media and Bad Wolf.

However, anime revenues grew, with the impact of its acquisition of streaming service Crunchyroll kicking in.

The operating income drop was partially put down to the absence of the GSN Games business from the results. Sony sold the division to Scopely at the back end of 2021 for $1B. However, there was also a decrease in sales more generally.

Sony Corp is forecasting Sony Pictures Entertainment will next year see an 11% rise in sales, as theatrical franchise films launch and Crunchyroll and business in India expand. It is predicting operating income will remain flat, with sales improving but marketing costs increasing.

Overall, Sony Corp grew its sales to 11.54 trillion yen ($85B), up from 9.92 trillion yen in 2022 and operating income was broadly flat at 1.2 trillion yen ($8.9B). Games and services grew revenues significantly, with sales of 3.64 trillion yen ($27B) up from 2.74 billion yen a year prior, but operating income fell.