CHIBA, Japan (Reuters) - Sony Corp is relying more heavily on its PlayStation 3 game consoles to make money for its game unit in the year to March, as weak sales of handhelds threaten to undermine a business the company's CEO is banking on to help return his company to profit.
Sony's new CEO, Kazuo Hirai, has said growing sales in games, digital cameras, smartphones and tablets, along with new businesses such as medical equipment, will help the consumer electronics company return to profit as it draws back from money-losing TVs.
"I think we will be profitable this year," Andrew House, the executive in charge of Sony's gaming unit told Reuters in an interview on the sidelines of the Tokyo Game Show on Thursday. "We have a growing installed base, growing connectivity of the PS3."
He declined to say whether his division would improve on the 29 billion yen ($371 million) operating profit posted in the year ended March 31. On August 2, it cut its forecast for sales of Vita and PSP handheld consoles this business year to 12 million from 16 million.
Sony's game unit is maintaining its target of an 80 billion yen operating profit on sales of 1 trillion yen in the year to March 2015, the timetable the firm has set for the planned turnaround on which the CEO will be judged.
Investors are concerned that Sony will struggle to achieve a turnaround. It has already slashed its earnings outlook since Hirai took office in April. After its first quarter it lowered its annual operating profit prediction to 130 billion yen from 180 billion yen. In the previous twelve months it posted a loss of 67 billion yen.
The average estimate of 14 analysts surveyed by Thomson Reuters since then is for operating profit of 110 billion for the 12 months.
($1 = 78.2700 Japanese yen)
Writing by Mayumi Negishi; Editing by Daniel Magnowski