Sony has raised its annual profit outlook after posting record-breaking numbers in the last quarter.

The Japanese tech giant’s surging profits in its gaming business are boding well for the launch of the next-generation PlayStation 5 gaming console next month.

The company boosted its annual profit forecast by 13 percent to 700 billion yen ($6.7 billion), after reporting a 317.76 billion-yen profit in the second quarter. The consensus among twenty-four analysts compiled by Refinitiv is 672.33 billion yen.

Sony also noted that its gaming division will post an annual profit of 300 billion yen, considerably higher than the previous estimate of 240 billion yen. This is largely driven by consumers’ pivot toward gaming software downloads and online subscription services during coronavirus-related lockdowns.

As for the highly anticipated PS5 console, which is set for release on November 12 in the United States, Sony is expecting sales of 7.6 million units or more in the year through March, according to the company’s Chief Financial Officer Hiroki Totoki. That figure is roughly in line with the sales achieved for the PS4 when it was launched seven years ago.

The price point of the PS5 Digital Edition, which does not have a disc drive, will start at $399.99 and will compete directly with Microsoft’s Xbox Series X and Series S game consoles. The “regular” version of the console will cost $499.99.

Demand for the consoles has already reached record levels. According to Jim Ryan, CEO of Sony Interactive Entertainment, Sony presold as many PS5 consoles in the first twelve hours in the United States as in the first twelve weeks for the PS4.

The upward profit revision of the company also reflects a solid start for Japanese animated film Demon Slayer, which is co-distributed by Sony’s music unit. The movie has been shattering box-office records in Japan since its release on October 16.

Totoki, however, warned of near-term struggles in the company’s image sensor business, as tighter U.S. restrictions on Chinese tech player Huawei might hurt profits going forward.

Huawei was Sony’s second-largest image sensor customer after Apple, accounting for about 20 percent of its $10 billion in revenue.

“It will take considerable time until other customers adopt the trend of high-performance, large-sized sensors led by the Chinese customer,” Totoki said in a briefing.

In response, Sony slashed its profit outlook by 38 percent to 81 billion yen for its sensor business.

Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters