PlayStation’s Profits Witness a Drop of 37% Year-on-Year

Sony is one of the biggest Japanese multinational conglomerates. Sony Interactive Entertainment has many subsidiaries, but we want to talk about one. They take on the video game side, having PlayStation as one of the biggest console and video game brands.

Almost every person in the world knows about Sony and PlayStation. They recently presented their financial report for the first quarter of the fiscal year. It takes place between April 1st-June 30th and comes with details on PS4 and PS5 shipments.

PS4 & PS5 Shipment

In total, 2.4 million units of PS5 were sold to retailers globally in the previous financial report. If we calculate that, as of June 30, 2022, there have been 21.7 million units of PS5 sold. Unfortunately, Sony is not providing reports on their PS4 sales, so the only official number we have is 117 million from the previous report.

Game & Network Services Segment

From the above slides, you can see the performance of the G&NS Segment. It includes all PlayStation and Playstation Network numbers, including the software and other sales.

Their sales have dropped by 2% or 11.7 billion yen(calculating in JPY). The reason behind that decrease is the sales of first and third-party games, also the current situation of the weak yen. Their OI (Operating Income) has decreased by a whopping 37% or 30.5 billion yen. The growth of development expenses in their existing studios also contributes to this.

Their sales forecast for the full fiscal year has been reduced by 1% due to the drop in third-party game sales. Furthermore, the OI prediction has also been reduced by 16% for the same reasons. The expenses of acquisitions also contribute to this number.

The unexpectedly early acquisition of Bungie is part of this fiscal year. It would have been recorded in the following report if they had acquired them later. As a result, it adds 13 billion yen to this fiscal year’s expenses.

Increase in Digital Sales

One big takeaway from this is digital sales. If you love your physical copies of the game, then this may not be good news for you. 79% of the total PS5 and PS4 games sold in the latest fiscal quarter have been sold digitally. It is a massive increase from their previous best number, 71%, in Q1 of 2021.

They recently had it drop to 62% in Q2 & Q3, which went back to 71% in Q4. This is their highest number yet. However, the active monthly users dropped by 4 million on PSN. It shows that more people are going towards the digital route over the mentioned service.

Sony will likely focus on selling their games through the PS Store now, especially after the introduction of their upcoming PS Stars Program. Hence, this is terrible news for those who purchase physical copies of their games on PS5 and PS4.

PlayStation will shift towards the digital realm, so will Sony continue to offer the PS5 system without a disc drive? We should know that in about half a decade or so.

PS Plus Doing Great in the US

Some good news for PlayStation is the performance of PS Plus in the US. According to a survey by Statista, PS Plus is the most popular gaming service in the US. The survey was conducted on 1099 US video game subscribers. They were asked whether they had spent any money on different gaming services.

The numbers can be seen above, with 41% of the people spending on PS Now/PS Plus. Luna/Amazon Prime takes the second rank, and the Xbox gaming pass takes the third spot. Although we have extensively discussed Xbox’s quarterly fiscal year report, they are still doing better than PlayStation.

Overall

It should be noted that Sony as a whole is doing a lot better. The sales and operating income show a moderate improvement year-on-year.

However, we should also mention that there is a possibility of the PS5 prices increasing due to the topic of inflation that is likely to come at the investors’ conference. The components, resources, production, and logistics have become expensive at an alarming rate. So far, the only reason they haven’t increased is that Sony has absorbed the cost rates.

In the meantime, what do you think lies in the future of Sony Interactive Entertainment? Let us know below, and we will discuss it with you!

Here is a similar read: Xbox Sales are Better Than PS5 Despite a Decline.