TOKYO – Sony said on Tuesday that annual net profit dipped 3.5 percent on year but beat its forecast as takings in games and music offset losses in the financial and chip sectors.

The entertainment and electronics behemoth has been in the spotlight after reports said it was working with Apollo Global Management on a potential joint bid for US film and television giant Paramount Global.

The Japanese company has declined to comment on the reports, which cited anonymous sources saying Sony and Apollo have made a $26 billion proposal to buy Paramount, the owner of CBS, Comedy Central and MTV.

Such a takeover could strengthen Sony's massive movie sector behind the mega-grossing "Spider-Man" films, including the Oscar-nominated "Across the Spider-Verse."

On Tuesday, Sony logged a net profit of 970.6 billion yen ($6.2 billion) for 2023–2024 beating the company's forecast of 920 billion yen.

Sony said it had enjoyed "significant increases in sales" in its game and music sectors, boosted by the weaker yen.

Revenue was also up for sensors used in iPhone cameras and financial services, although operating income decreased in these segments.

For the current financial year, Sony forecast net profits of 925 billion yen.

"Sales are expected to decrease year on year primarily due to an expected significant decrease in sales in... financial services" and other businesses including games, it said.

But it predicted better sales for sensors and music, thanks to higher revenues from streaming services.

"Sony owns the rights to original music. That serves as Sony's cash cow," Hideki Yasuda at Toyo Securities told Agence France-Presse (AFP) before the earnings announcement.

Sony Music Entertainment is reportedly preparing to bid against two major private funds for InfoCom, the parent company of a popular Japanese manga app, in a deal said to be worth 200 billion yen ($1.3 billion).

In 2023–2024, Sony sold 20.8 million units of its flagship PlayStation 5 console, almost meeting its target of 21 million which it had trimmed in February.

Yasuda said the console, in its fourth year on the market, may have suffered a reputational hit after Sony PlayStation announced 900 layoffs in February.

Sony said earlier Monday that two veteran executives will take over as chief executive officers of (CEOs) its gaming unit, taking the reins from Jim Ryan, who retired in March.

Hermen Hulst and Hideaki Nishino will report to Sony Interactive Entertainment's group chairman Hiroki Totoki, who had been filling in as interim CEO.