TOKYO, May 14 (Reuters) - Japan's Sony Group ( SONY )

reported a 7% fall in annual operating profit on Tuesday, hit by

the performance of its financial business.

Profit for the year ended March was 1.2 trillion yen ($7.67

billion), in line with an average estimate from 23 analysts

polled by LSEG.

Sony ( SONY ) said it sold 20.8 million PlayStation 5 units in the

full year. That compared with a revised target of 21 million

units issued in February following weaker-than-expected sales

over the year-end shopping season.

The gaming sector has been hit by a slowdown with Xbox maker

Microsoft ( MSFT ) last week moving to shutter studios including

Tokyo-based Tango Gameworks in the latest cost-cutting measures.

Sony ( SONY ) said in February it would lay off 900 workers at its

gaming business and shutter a London studio.

Known as the inventor of the Walkman and the MiniDisc, Sony ( SONY )

has transformed from an electronics manufacturer into an

entertainment and technology juggernaut spanning movies, music

and games and chips.

The Japanese tech conglomerate plans a partial spin-off of

its financial unit with a listing in October 2025 in order to

focus on its entertainment and chips units.

Sony Pictures last week sent a letter expressing interest in

acquiring Paramount with private equity firm Apollo

, Reuters reported.

A deal would create a formidable Hollywood studio with a

share of around 20% of the North American box office.

($1 = 156.4200 yen)

(Reporting by Sam Nussey; Editing by Subhranshu Sahu)