As Sony releases its results for the full fiscal year ending March 2023, one thing is clear- its bottom line has been significantly dented by the lack of a major tentpole release from its franchise IPs over the last year. Entertainment attorney Brandon Blake, with Blake & Wang P.A, breaks down the results.
$800M Decline
Operating income for Sony decreased by a hefty $800M this fiscal year, mostly due to the lack of major releases from any of their labels. Closing at $880M (down from $1.67B last year), this drop did not come as a surprise, but it is larger than was initially anticipated.
Licensing fees for their TV productions also dipped, mostly due to the lack of popular licensing deals like their 2021 Seinfeld deal. It’s worth noting that this could have a greater impact on Sony than other studios, as they are the only legacy Hollywood studio at the moment not running their own streaming platform. In fact, they have repeatedly pointed to their ability to remain agile and sell on product without the need to feed their own platform as a unique selling proposition.
On the Positive Side
In itself, these are not all that gloomy. The drop in tentpole-based revenue was already expected, after all. Additionally, Sony acquired two strong TV production companies (Industrial Media and Bad Wolf) last year. They saw solid growth from their anime arm, with Crunchyroll paying them back for its acquisition costs. Some of the operating income drop can also be laid at the door of GSN Games, which they sold on in 2021.
They saw a decent rise in sales, with games and services both growing significantly, too.
It is, however, an intriguing glimpse into the impact a failure to court strong theatrical releases can have on a balance sheet. A lesson we’ve seen repeated a lot over the last few years. Now let’s see what Sony itself takes from it.
