Sony has effectively rebuffed calls from an activist investor to spin off its image sensor business, which it described as “one of the pillars” of its future growth strategy.

The company spoke out as it cut a revenue forecast that was set only three months ago, saying that the outlook for its PlayStation 4 games console was softer than expected.

For the fiscal year through March 2020, Sony said it now expects revenues of ¥8.6tn ($79bn) compared with ¥8.8tn it projected in April. 

It was the first set of results since Third Point, a hedge fund run by US activist investor Daniel Loeb, launched a campaign for Sony to spin off its “crown jewel” image sensor business and focus on being a global entertainment company. 

The Japanese entertainment and electronics group has yet to provide an official response to Mr Loeb, saying it was seriously studying his proposal. 

But when asked if Sony would sell its image sensor business, which contributed 10 per cent to its first quarter revenue, Hiroki Totoki, its chief financial officer, said: “There is no change whatsoever in our stance that this is a critical business that forms one of the pillars for Sony’s growth strategy.” 

Most investors do not believe Sony will accept Mr Loeb’s proposals, which also include a call for the sale of its stake in its financial arm, but many are hopeful that the campaign would lead the Japanese group to implement other reforms to boost its profitability and growth prospects. 

Despite the recent turnround of its struggling electronics businesses, analysts said Sony’s outlook is uncertain as it braces for the fallout from the US-China trade dispute and tensions between Japan and South Korea over semiconductor sanctions.

Its core gaming business also faces potential disruption as the world’s biggest technology companies such as Google and Amazon look to begin game-streaming services.

The guidance cut followed a 1.9 per cent drop in quarterly revenue on weaker-than-expected demand for PS4, after Sony made comments in May that it was working on a successor to the console. It now expects to sell 15m PS4 units compared to the 16m it predicted three months ago.

Its other electronics businesses also struggled with a decline in sales of its Xperia smartphones and Bravia TVs. Quarterly net profit also plunged 33 per cent to ¥152bn. 

Also on Tuesday, Nintendo said its first quarter operating profit fell 10 per cent to ¥27.4bn, missing analyst forecasts, even as sales of Switch consoles remained strong for a usually quiet first quarter. The company, which plans to sell 18m Switch consoles by the end of March, sold 2.13m units in the April to June quarter, compared to 1.88m units it sold during the same period last year.

Analysts are expecting a boost in performance this year with a stronger line-up of gaming titles and the anticipated launch of the Switch Lite, a more affordable version of its flagship Switch console. The new version, which is due for release on September 20, will sell for $199.99.

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