Sony Q2 gaming profit tumbles 50% on higher costs

*

Gaming unit booked higher costs from development, acquisitions

*

Sold 3.3 mln PS5 units, same as a year earlier

*

Trimmed FY gaming profit forecast

By Sam Nussey

TOKYO, Nov 1 (Reuters) - Sony Group Corp’s (6758.T) second-quarter profit at its key gaming unit fell by 50% from a year earlier as the entertainment conglomerate booked higher costs from game development and acquisitions, the company said on Tuesday.

The Tokyo-headquartered company’s gaming unit recorded a profit of 42.1 billion yen ($284.63 million) after selling 3.3 million units of its PlayStation 5 (PS5) console in the second quarter, equal to the year ago sales.

Sony’s shares have fallen by almost a third so far this year as investors fret about the strength of the games business amid competition from Xbox maker Microsoft Corp (MSFT.O) and after a fading boost from stuck-at-home consumers during the COVID-19 pandemic.

The conglomerate has said it plan to ramp up production of the PS5, which has been affected by supply chain snarls, and broaden its games portfolio on other platforms.

It trimmed its full-year forecast for the games business by 12% to 225 billion yen citing lower software sales from third-party developers and the impact of dollar-denominated costs.

PlayStation launched a remake of “The Last of Us” in September with “God of War Ragnarok” due for release in November for the year-end shopping season.

Sony reported overall group operating profit rose 8% to 344 billion yen ($2.32 billion) in the July-September quarter, beating analyst estimates, after units including the music business offset the weakness in gaming. ($1 = 147.9100 yen)