Sony seeks finance unit IPO, boosts entertainment 2023

As it focuses on entertainment and image sensors, Sony Group Corp. said Thursday it is considering a partial spin-off of its finance sector three years after assuming full control.

Sony said it is exploring a two- to three-year timeframe to spin off Sony Financial Group, which operates life insurance and banking, and list it with a share of slightly under 20%.

“It is a challenge to balance this with our investment in other growth areas such as entertainment and image sensors,” Sony CFO Hiroki Totoki said at a strategy conference.

The video gaming, music, and film giant is seeking synergies. It claimed HBO’s smash drama “The Last of Us” fueled gaming franchise and music sales.

The corporation claimed tax reforms made a partial spin-off of Sony Financial viable. The newly listed entity would keep Sony branding.

“It doesn’t change anything drastically in terms of Sony’s outlook but it does make it a more pure play entertainment company which the market generally likes,” LightStream Research analyst Mio Kato told Smartkarma.

Finance income fell 5% to 1.45 trillion yen ($10.74 billion) in March. A real estate transaction boosted operating profit by 49% to 223.9 billion yen.

Due to an accounting adjustment, Sony predicts a 40% decline in sales and a 20% loss in profit in the current financial year.

Sony said it will buy back 2.03% of its stock, its Tokyo share price rose 6%.

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Sony aims to sell 25 million PlayStation 5 systems this fiscal year as supply chain issues alleviate. That’s PlayStation’s record.

It also expects first-party software revenues to fall due to games pipeline problems.

Sony’s “Marvel’s Spider-Man” sequel is coming this year.

Nintendo Co Ltd., which has sold over 125 million Switch consoles, sold over 10 million copies of “The Legend of Zelda: Tears of the Kingdom” in the first three days.

“The Super Mario Bros. Movie” also did well.

Sony CEO Kenichiro Yoshida recently saw the film in Tokyo and played “Super Mario.”

“Loveable characters and IP can live for 30, 50, or 100 years,” he remarked.

“We want to invest in that for sustainable growth,” Yoshida added.

($1 = 135.0500 yen)

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