Demon Slayer success fuels Sony’s 8% profit increase

Sony is riding a wave of momentum heading into 2026, with the Japanese conglomerate announcing a significant boost to its profit forecast for the year ending March. The company raised its operating profit outlook by 8 percent to 1.43 trillion yen, equivalent to $9.5 billion, citing lighter-than-expected impact from U.S. tariffs and the impressive performance of its entertainment and semiconductor divisions.

The positive guidance came as Sony reported its July-September quarter results, which showed operating profit climbing 10 percent to 429 billion yen. The gains were driven primarily by strong performance in the company’s music unit, which encompasses its rapidly growing anime business, alongside continued success in its chips division. The results underscore Sony’s successful transformation from a household electronics manufacturer into a global entertainment powerhouse.

Entertainment division leads the charge

Sony’s entertainment arm proved to be the star performer in the latest quarter, with anime content driving significant revenue growth. The Japanese conglomerate specifically highlighted the success of the animated film Demon Slayer: Kimetsu no Yaiba Infinity Castle as a major contributor to the strong results. The film’s commercial performance reflects the surging global appetite for anime content, a trend Sony has capitalized on through both theatrical releases and streaming platforms.

This strategic pivot toward entertainment represents a fundamental shift in how the company generates revenue and builds shareholder value. Where Sony was once synonymous with Walkmans and televisions, it now derives substantial profits from creative content that resonates with international audiences. The anime boom in particular has positioned Sony as a key player in a multi-billion dollar industry that continues expanding at rapid rates.

Gaming faces headwinds despite strong hardware sales

While Sony’s entertainment division thrived, the company’s gaming business encountered challenges during the quarter. Profit at the games division fell as Sony recorded impairment losses connected to the Destiny 2 video game, a title that failed to meet internal performance expectations. Chief Financial Officer Lin Tao acknowledged during a briefing that user engagement for the game has not aligned with what Sony anticipated when it acquired Bungie, the development studio behind the title.

Despite the gaming profit decline, PlayStation hardware continues performing respectably in the market. Sony sold 3.9 million units of its PlayStation 5 during the quarter, representing a modest increase compared to the same period the previous year. The company expressed confidence in expanding its console install base during the critical year-end holiday sales season while maintaining profitability across the entire gaming segment.

New titles provide optimism for growth

The release of Ghost of Yotei, which launched last month, has injected fresh energy into Sony’s gaming prospects. The title has sold 3.3 million units and received strong critical acclaim, positioning it as a potential driver for future console upgrades and gaming hardware purchases. With major releases on the horizon, including the highly anticipated Grand Theft Auto VI, Sony anticipates meaningful tailwinds for its PlayStation business as consumers look to invest in new gaming experiences.

Take-Two Interactive announced last week that Grand Theft Auto VI has been delayed to November 2026, pushing back its release for a second time. Despite the postponement, the blockbuster title remains expected to significantly boost Sony’s gaming division as customers either upgrade existing PlayStation 5 consoles or purchase specialized gaming hardware for the first time.

Semiconductor strength and tariff relief

Sony’s chips division contributed substantially to quarterly gains, driven by increased sales of larger image sensors used in smartphones and other devices. Customers may have accelerated purchases ahead of potential tariff increases, though Sony expects tariff impacts to be less severe than initially feared. The company now projects a 50 billion yen hit from tariffs during the financial year, down from an August estimate of 70 billion yen.

The revised tariff outlook helped justify the improved profit guidance, as Sony benefits from both operational strength and a more favorable regulatory environment than previously anticipated. The company’s diversified business model, spanning entertainment, gaming, and semiconductors, continues proving resilient against global economic uncertainties.

Shareholder returns signal confidence

Sony’s confidence in its business trajectory was reinforced through a substantial share buyback program. The company announced plans to repurchase up to 35 million shares for approximately 100 billion yen. Investor enthusiasm following the earnings announcement was palpable, with Sony’s stock closing up 5.5 percent on the day, reflecting market approval of both the financial results and forward guidance.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. The author and publication are not registered investment advisors and do not provide personalized investment recommendations.