Japanse consumer electronics and media conglomerate Sony is expected to post record profits this year due to the growth of its imaging and gaming business, and the reversal of fortunes of its Sony Pictures division. Sony expects that its annual operating profit will jump by over 73 percent compared to last year, reaching around 500 billion yen, i.e. approximately $4.5 billion, with the image sensor and game console businesses contributing a substantial amount to its growth. If Sony manages to realize its prediction, this year could become one of the conglomerate's best periods to date, inching closer to its record profits posted back in 1998. This is in stark contrast to previous years when the electronics giant struggled to make any profit, with its recent turnaround attributed to the company's massive restructuring efforts which saw the firm giving up on its VAIO laptop business and downsizing its television unit.
Major factors that could affect Sony's growth this year are the performance of its chip, gaming, and entertainment divisions. The company expects that its chip unit that includes its image sensor business will return to profitability this year after a loss-making 2016 due to the image sensor factory in Kumamoto operating at its full capacity over the course of 2017. Meanwhile, the company's game console business, which includes PlayStation hardware and its online gaming operations, is expected to grow by more than 25 percent, further boosting the company's growth figures. In addition to the growth of its imaging and gaming businesses, Sony also expects that its Sony Pictures division will reverse its fortunes and start reporting profits in 2017.
Sony's new expectations stand in stark contrast to its performance last year, which was negatively affected by the poor performance of its image sensor business. The image sensor unit of the firm reported an operating loss in 2016 after its production of sensors were disrupted by the deadly Kumamoto Earthquake in 2016. The earthquake severely affected its factory in Kumamoto, which is one of Sony's five image sensor factories, resulting in around 115 billion yen ($1.03 billion) in damages for the electronics firm. The company's mobile unit reported a profit last year after a strategic downsizing effort which saw its smartphone division increasing its focus on flagship devices, i.e. smartphone models that can be sold with high-profit margins.