Sony Group Corp. (TYO: 6758) raised its full-year operating profit forecast by 8% to ¥1.43 trillion ($9.48 billion), driven by strong performances in its entertainment and semiconductor divisions, as well as a smaller-than-expected impact from U.S. trade tariffs. The upbeat guidance underscores how the Japanese conglomerate’s pivot from consumer electronics to content and components continues to deliver resilience amid global economic uncertainty.

For the fiscal quarter ended September 30, Sony’s operating profit jumped 10% year-on-year to ¥429 billion, powered by surging anime and music revenues and a robust chip business. The results, released Tuesday, sent Sony shares 6% higher in Tokyo trading.

Anime Powerhouse: A Cultural and Financial Engine

The standout performer in Sony’s latest results was its entertainment division, anchored by the runaway success of the animated film “Demon Slayer: Kimetsu no Yaiba Infinity Castle.” The title became one of Japan’s highest-grossing releases this year, boosting revenue across Sony’s music and content ecosystem  from soundtrack streaming to licensing.

Once primarily known for its televisions and Walkman devices, Sony has reinvented itself as a global entertainment leader, with anime at the heart of that strategy. Its acquisition of Crunchyroll and Aniplex’s expanding IP portfolio have turned the company into the largest distributor of anime content worldwide.

“Anime is now to Sony what PlayStation was in the 2000s  a defining growth engine,” said Takuya Uehara, senior analyst at Nomura Securities. “It is scalable, digitally driven, and globally monetizable.”

Sony’s strategic focus on cross-platform integration  leveraging its film, streaming, and gaming arms  continues to pay dividends. Analysts estimate that anime-related properties contributed nearly 15% of total entertainment revenue this quarter, cementing the company’s shift toward content as its primary profit driver.

Chip Division: Riding Smartphone and AI Tailwinds

Sony’s semiconductor unit, a global leader in image sensors for smartphones, also posted strong results amid rising demand for larger, high-end camera sensors from smartphone makers.

The division’s strength reflects growing adoption of AI-enhanced imaging systems, which require more sophisticated sensors to support computational photography and augmented reality features.

“Sony’s sensor business remains the backbone of its technology operations,” said Hiroshi Tanaka, technology analyst at JPMorgan. “The company’s position in the high-margin sensor segment provides insulation from cyclical pressures in other consumer categories.”

The outlook for Sony’s chip unit is particularly robust given its ties to Apple’s iPhone Pro line and emerging demand from Chinese smartphone manufacturers seeking premium hardware differentiation.

Gaming Division Faces Headwinds Amid Market Transition

In contrast, Sony’s gaming division underperformed. Profits fell during the quarter, weighed down by impairment losses tied to the “Destiny 2” franchise, which underdelivered commercially.

Sony sold 3.9 million PlayStation 5 units, up slightly from a year ago but below internal targets, signaling a cooling console market after the pandemic-driven surge. The delay of “Grand Theft Auto VI” by Take-Two Interactive — now set for November 2026 — could further defer momentum in the gaming segment.

Meanwhile, competitors are pressing their advantage. Nintendo recently raised its annual forecast for the Switch 2 to 19 million units, buoyed by strong consumer demand for its June launch. The shift toward hybrid gaming devices and portable consoles is redefining the competitive landscape that Sony once dominated.

Financial Strength and Shareholder Returns

Despite uneven performance across divisions, Sony’s financial position remains solid. The company announced plans to repurchase up to 35 million shares worth roughly ¥100 billion, underscoring management’s confidence in its long-term trajectory.

Lower-than-expected tariff exposure from U.S. trade policies also provided relief, enabling Sony to maintain robust free cash flow and offset currency volatility.

“Sony is entering a phase of balance leaning on its strong content pipeline and semiconductor franchise to weather softness in gaming,” said Junichi Arai, equity strategist at Mitsubishi UFJ Morgan Stanley Securities. “The buyback is a signal that management sees value at current levels.”

Outlook: Entertainment and AI Define Sony’s Next Chapter

Looking ahead to 2026, Sony’s strategic narrative hinges on two high-growth pillars  digital entertainment and intelligent hardware. With anime franchises scaling globally, a dominant image-sensor business, and a stabilizing tariff backdrop, the company is well-positioned to sustain earnings momentum.

However, the path forward isn’t without risk. A prolonged console slowdown, intensifying competition in streaming, and geopolitical uncertainties around semiconductor supply chains could temper growth.

Still, Sony’s ongoing transformation  from a manufacturer to a creative and technological ecosystem  appears to be gaining speed. As CEO Kenichiro Yoshida has emphasized, “The future of Sony lies in the fusion of creativity and technology.” If the latest results are any indication, that fusion is starting to deliver.