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Sony Pictures Profits Drop Significantly in 2nd Quarter
It continues to be a difficult year for the film and TV industry, with the latest company on the downturn being Sony Pictures. Despite the fact that Sony itself reported largely unchanged revenues, the Sony Pictures division fell to about $299 million dollars in Q2, a $67 million dollar loss when compared to an equivalent period last year. There are various reasons for the slip, but the largest factor seems to be the almost completely lost revenues from theater releases.
According to analysts, Sony had been hoping the share prices would rise about 101 Japanese Yen, or around $1 American, per share. Expected revenue for Sony overall was about 1.94 trillion Yen, a 9% drop, but they did better than expected with a largely unchanged 2.11 trillion total. Sony is a company with a lot of different projects going and many different products, meaning they've not felt the full damage of the pandemic.
The same can't be said for the Sony Pictures division though. Sony Pictures saw their revenue from theatrical releases devastated by the Coronavirus, with their most recent film The Broken Hearts Gallery barely clearing the $4 million mark. Quarantine restrictions have also slashed profits from TV and advertising. Some of this was offset by a reduced expenditure for advertising and a slight bump to TV licensing, but not enough to save the division from posting a significantly worse report compared to last year's figures.
It's not over yet either. In a call to investors CFO Totoki Hiroki admitted that “the negative impact of not being able to release our titles is expected to continue for several years.” On the other hand the music, network, and games divisions of Sony have had significant boost, likely in part due to lockdown encouraging purchase of products that can be consumed without going outside. The PS5 in particular has been doing great pre-order numbers, already outperforming the pre-order sales of the PS4. Still, the U.S. Sony Pictures Entertainment’s marketing and distribution teams were hit with layoffs as the film and television sections begin to merge into one entity, and many people are out of work due to the decision. Hopefully things will turn around soon, and the people who are out of work can find employment quickly.
