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Today Sony's second quarter (fiscal 2018) financial results were made public and the message is overall positive. Sony has posted a $2.1 billion profit this quarter, largely in thanks to its PlayStation gaming division that saw surging software sales due to Sony's strong catalog of games.

Wall Street responded after the results were released early this morning, as shares of Sony (NYSE:SNE) closed the day up nearly five percent.

Sony Fiscal 2Q2018 results:

Annual profit forecast raised 30% to $7.7 billion for the yearRevenue for 2Q was $19.6 billion, up from $18.6B a year agoEarnings per share of $1.20 versus $0.91 consensus estimatesGaming division contributes $800 million in profitPlayStation Plus subscriber count at an all-time high: 34.3 million

Gaming (PlayStation) and Music segments are growing

Sony enjoyed a very good quarter thanks to its PlayStation gaming brand. Gaming as a whole seems to be looking strong, as Nintendo also posted better than expected results for the quarter thanks to solid demand. Sales for the Game & Network division grew by 27 percent YoY thanks to new additions to Sony's first-party lineup such as the latest Spiderman game.

The firm also cites an uptick in PS4 hardware unit sales as well as strong growth for its PlayStation Plus premium paid-for membership service.

An interesting note, Sony is finally publishing its PlayStation Plus subscriber numbers per quarter with its financial earnings releases. The number of subscribers is at an all-time high at 34.3 million users paying to receive the benefits of the service such as free monthly games.

Adding to that, as we reported for the previous quarter where Sony totaled 82 million PS4's shipped, the company sold an additional 3.9 million units, bringing the total to around 86 million consoles sold.

Lastly, for the gaming division, 75.1 million PS4 titles were sold, and 28 percent of those were digital downloads. Spider-Man shipped 3.3 million units in the quarter, impressive considering only a month of sales in the quarter, and about 2 million GOD OF WAR titles were shipped as well.

Music was also a contributor to Sony's strong earnings. Top sellers for Sony included Tavis Scott's 'ASTROWORLD', Luke Combs 'This One's for You', George Ezra's 'Staying at Tamara's', and Martin Garrix 'Releases'.

Sony recently added EMI Music Publishing to its total catalog which brings the number of titles it can collect royalties on to 4.36 million tracks.

The Music segment as a whole booked $950 million and about three-quarters of that was purely digital with the remaining quarter coming from physical media sales. The company noted a slight decline in paid-for downloads, however, this was mostly offsetby an increase in streaming according to Sony.

Sony Mobile continues to shrink while Pictures remains relatively flat

This quarter there was no 'Spider-Man: Homecoming' to boost the Pictures group and despite new releases like 'The Equalizer 2', numbers for the Sony Pictures segment dropped slightly YoY. However companyrepresentatives that the Pictures group will book over $1 billion in box-office revenue for the first three calendar quarters of this year, a feat it hasn't managed for over four years.

Pictures were boosted by television revenue from Jumanji and Peter Rabbit. Total revenue for the group was stated as $2.18 billion.

The largest blight to report today is Sony's Mobile Communications segment. Sales dropped a further 32 percent YoY, with the company citing plummeting demand in Europe for its handset devices.

Sony released a "profitability improvement plan" for its mobile business and the outlook is not exactly rosy. The firm plans to slash the scale (and thus cost) of the business in the next two years and they expect a whopping three years of losses for the division; 2020 or 2021 is the earliest date that predicted for a potential turn-around. Its hard to say if this is just lip-service but at this point, something must be done as Xperia handsets have all but disappeared from most conversations regarding new smartphones, at least in consumers minds. An excerpt of their statement here:

After intense discussion regarding the future of this business, we concluded that it is necessary to further reduce scale in order to reduce business risk. To that end, we plan to reduce the operating costs incurred in the business in the fiscal year ending March 31, 2021 (“FY20”) to approximately 50% of the level recorded in the fiscal year ended March 31, 2018. We will also proactively leverage the technology and business infrastructure of our branded hardware business. We will improve product appeal at the same time...We take very seriously the fact that we expect operating loss to continue for three fiscal years, and we aim to implement a profitability improvement plan that will enable us to record a profit in FY20.

Sony has the ambitious goal of slashing its costs for the division by 50% yet still making the handsets more attractive to customers. It has its work cut out for it!

Looking ahead for Sony

Sony seems to be pulled in two different directions. Its legacy businesses, such as its home entertainment division, has been ravaged by a decade-long onslaught of cheaper Korean and Chinese alternatives and has been cutting its once lofty margins for years now. The segment isn't exactly in trouble, but its down 9 percent YoY and the trend doesn't look great.

Sony Pictures, while not earning super well at the moment, is in a good place with profitability improving despite flat revenue, and the firm has refocused on growing its great portfolio of IP. Ten years ago Sony wouldn't have had the wisdom to expand its Spider-Man franchise with a Venom release. Now, Marvel has shown how its done when it comes to cinematic universes and Sony is following suit. Pictures is going to continue to be a consistent pillar for Sony moving forward.

Nothing needs to be said for Gaming except that its a great time to be the owner of the world's number 1 gaming brand. Gaming continues to grow globally and PlayStation is very nicely positioned in the market. All eyes are on Sony as cross-play advocates continue to get louder and Microsoft seems keen to take the lead here.

The biggest question mark for the firm is its Xperia business. The Mobile Communications division is bleeding cash and quarter after quarter the outlook grows even dimmer. There isn't a single reason why the firm can't compete with the best out there; they have all the technology they need to make a world-beater handset. Its going to be tough, they aim to slash costs by half and yet somehow make their products even more competitive. Only time will tell on this front.