Sony to face a tough 2026 before rebound takes shape in 2027

Sony Group (TSE: 6758) is bracing for a difficult 2026, as macroeconomic pressures and US tariffs on Chinese goods weigh on its hardware-heavy business lines. The Japanese conglomerate recently reported a -0.5% year-over-year drop in revenue for fiscal 2025, as weakness across its Game & Network Services (G&NS), Entertainment, Technology & Services (ET&S), and Financial Services divisions overshadowed steady gains in Music, Pictures, and Imaging.

Revenue is expected to fall -7.4% year-on-year to JP¥12 trillion in 2026. The anticipated decline reflects rising component costs and potential supply chain disruptions, particularly in G&NS and ET&S—both of which are projected to see revenues shrink by -4% in 2026. Meanwhile, the company’s creative content businesses are proving more resilient: Music and Pictures are forecast to grow by +3% and +2%, respectively. Imaging & Sensing Solutions (I&SS) segment is set to expand +5%, supported by stable handset demand and early traction in automotive and industrial markets. Financial Services is expected to inch up +1.2%, recovering from a sharp -47% drop in 2025.

Looking ahead, analysts are optimistic about 2027. Group revenue is projected to rebound by +5% to JP¥12.6 trillion. G&NS is expected to lead the turnaround, fueled by high-profile game launches—including Grand Theft Auto VI and Monster Hunter Wilds—which should drive software and subscription sales. Music and Pictures are also forecast to post strong growth of +5% and +9%, respectively, amid robust demand from streaming platforms and cinemas. Imaging & Sensing Solutions is projected to grow by +7% as adoption accelerates across mobile and automotive markets. Financial Services is expected to post a sharp +21% rebound. ET&S, however, is likely to remain flat.