As a result, as of September 30, 2022, there were 25 million PS5s worldwide, with 3.3 million consoles hitting shelves in a quarter, the same as the same period last year. However, our expectations were better, especially seeing the PS5 taking control of the US market in August and September, but not taking off.
PS5 production: When Sony put it under the pedal
So with 5.7 million PS5s distributed by the middle of the fiscal year, Sony would have to deliver another 12.3 million between October and March to hit its 18 million target. Despite the long road ahead, Sony management was confident and revealed a little secret at the press conference: the manufacturer actually produced 6.5 million PS5 units this quarter, so it has voluntarily reserved a sufficient stock of the machine to meet the needs of the company. for later use. According to CFO Hiroki Totoki, Sony could even well exceed its annual target of 18 million. So we can expect a surge in console numbers in November/December, but at the same time, the PS5 is still far behind the PS4, which has a fleet of 29.4 million units at the same stage.
In terms of PS5 hardware production, material supply and logistics restrictions have been significantly eased. This quarter, the output exceeded 6.5 million units, and the growth rate exceeded expectations.
Sony CFO Hiroki Totoki
PlayStation Plus: Subscriptions are down, not revenue
Other stats show that PlayStation has encountered some short-term difficulties. Despite the new formula, PlayStation Plus had 45.4 million subscribers at the end of September, compared to 47.2 million a year earlier. Active users of the PlayStation console also fell by 2 million to 102 million. According to Sony, the drop was largely due to a drop in PS4 users that ended up being faster than expected. Interestingly, despite the decline in PlayStation Plus subscribers, subscriber turnover was higher than last year (€789 million vs. €682 million), which undoubtedly reflects a certain number of subscribers in the Extra/Premium formula the passage.
Game sales are also down, something Sony prefers to chalk up to the disappearance of containment rather than a release catalogue without a special offer. It sold 62.5 million PlayStation games between July and September, compared with 76.4 million last year. Of this batch, there are 6.7 million PlayStation Studios games (up from 7.6 million last year), a period that includes the launch of The Last of Us Part 1. But while fewer games were sold, revenue from game sales (boxes and downloads) increased. Sony explained that the favorable exchange rate actually offset the decline in third-party game and add-on sales. In addition, dematerialization is still making progress (63% compared to 62% a year ago).
Sony Interactive Entertainment Results
period | turnover | operating profit | net income |
---|---|---|---|
July 2021 – September 2021 | 4.4 million euros | 562.7 million euros | – |
July 2022 – September 2022 | 4.9 billion euros | 286.4 million euros | – |
PS5 price increase limit is broken
Sony Interactive Entertainment’s quarterly revenue rose 12% (4.9 billion euros to 4.4 billion euros), a second-quarter record for all manufacturers, but operating profit fell 40% (286 million euros to 562 million euros) disappointingly. PlayStation also revised its annual financial year targets, expecting profits to be lower than expected (1.5 billion euros instead of 1.7 billion euros). The rare fact that video games won’t be the group’s most profitable branch this fiscal year goes to Sony Music, which is targeting a 1.8 billion euro profit.
Sony explained that the reasons for the decline in its video game profits were multi-faceted, namely lower sales of games and additional third-party content, increased game development costs, the impact of interest rate exchange rates (this time negative) rates, and also recorded its acquisitions with related fees, including Bungie’s fees. The only positive in this table: fewer losses related to console sales. In other words, the much-discussed PS5 price hike is an attempt to limit losses if profits really drop. Profits, however, are still much higher than Sony’s profits in the past.
“Regarding hardware profitability, we expect a slight improvement from previous guidance due to price changes and lower costs, partially offset by negative currency impact. On software profitability, we lowered our guidance as we believe engagement will take longer to recover from its current low levels.”, explains Hiroki Totoki.
The results for the quarter were very positive for the Sony Group of companies as a whole, with a turnover of EUR 18.7 billion (+16%), an operating profit of EUR 2.3 billion (+8%) and a net profit of EUR 1.8 billion (+24%). The group has also decided to revise its forecast for the current fiscal year, now expecting a turnover of 79 billion euros, an operating profit of 7.9 billion euros and a net profit of 5.7 billion euros.
- Also read | PS5: Sony protects its profits first as prices rise