Sony, the Japanese entertainment and electronics giant, has reported an 18 percent jump in annual net profit, reaching 1.14 trillion yen ($7.7 billion) for the 2024-25 financial year. However, the company issued a cautious forecast for the current financial year, anticipating a 13 percent decrease to 930 billion yen in 2025-26.

The firm is closely monitoring the potential impact of US President Donald Trump's tariffs on its bottom line. Sony stated that it is actively responding to the already implemented tariffs and considering strategies for various possible future scenarios. They anticipate managing the profitability impact to approximately 100 billion yen, or less than 10 percent of the operating income forecast.

In February, Sony had increased its annual forecasts due to strong sales in its gaming, music, and other product divisions during the October-December holiday shopping season. Rakuten Securities chief analyst Yasuo Imanaka noted that Sony's video game, music, and film businesses are demonstrating steady performance. He expects the gaming sector to continue experiencing steady growth into the fiscal year ending in March 2026.

Imanaka suggested that Sony is equipped to handle the immediate effects of rising US tariffs due to stockpiled inventory in the United States. However, he cautioned that the long-term impact remains uncertain if high tariffs persist. Sony had previously increased the price of some PlayStation 5 consoles in select markets, excluding the United States, citing challenging global economic conditions. However, the price of the higher-spec PS5 Pro console, launched in November, has remained unchanged.

Bloomberg Intelligence's Masahiro Wakasugi also highlighted that tariffs are likely to pose a headwind in the coming year. However, he noted that the music and picture division's earnings could see strong growth, driven by the popularity of its streaming music and movies. Music streaming is a significant revenue source for Sony, supported by its extensive back catalog and a current roster of artists, including Beyonce and Lil Nas X.