After almost three decades at Sony, British gaming chief Jim Ryan is retiring. Hiroki Totoki, Sony’s group president, will step in as chief executive of the division until a permanent successor is found. He will be thinly spread. Profits are weakening at the Japanese entertainment group. Meeting PlayStation targets for this year will be tough.
Ryan will be hard to replace. He oversaw the launch of PlayStation 5. It is the best-selling console worldwide this year. This reflects creativity in the face of tough competition from Nintendo and Microsoft. The acquisition of US audiophile gear maker Audeze has also helped grow the fan base.
Totoki is not a natural fit for a role requiring showmanship. Since joining Sony in 1987, his core experience at Sony has been in finance. He has held the post of chief financial officer since 2018 and led the establishment of Sony Bank in 2001. He is new to his current role as president and chief operating officer, having only started in April.
Sony’s earnings missed expectations last month. Its profits slipped 17 per cent in the June quarter. It is weighed down by sharp drops in operating income in its financial services segment. Its image sensor chips business is exposed to slowing global demand for smartphones and microprocessors. A writers’ strike has delayed the release of movies and TV series at Sony Pictures.
That puts pressure on its lucrative gaming business to pick up the slack in the coming quarters. Its game and network services business accounts for the largest proportion of group sales. Yet sales of its flagship PlayStation 5 were weaker than expected in the last quarter.
Sony’s shares are up a fifth this year, but still trade at 17 times forward earnings, at a discount to local peers including Nintendo. That reflects the drag from the group’s weaker units. Turning around the group’s financial unit will be a full-time job for Totoki. Sony needs to find a full-time replacement for Ryan speedily, or this key business may be neglected.
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