Entertainment

PS5 console sales reach 25 million but Sony profits fall due to rising costs

There’s good and bad news for Sony as stock shortages for the PS5 finally come to an end but the price of making games cuts into profits.

The PlayStation 5 has hit another milestone, with Sony announcing that the official lifetime sales total is now exactly 25 million consoles. Microsoft don’t reveal sales figures for their hardware but the total for the Xbox Series X/S is thought to be around 18 million.

That’s a much smaller gap than it used to be, when the PlayStation 5 was outselling the Xbox by a factor of 2:1, with only 3.3 million PlayStation 5s shipped in the last three months. That makes for a total so far this financial year of just 5.7 million, despite Sony’s target for next March being 18 million.

Sony still think they can do that though and they’ve already manufactured 6.5 million consoles during the last three months, which is more than expected and, unless something else awful happens, effectively means the end of serious shortages.

If the stock situation is no longer a problem, the issue now is with how the global financial and energy crisis is putting a dampener on demand. In short, people still want a PlayStation 5 and its games, but they worry about how they can afford it.

Those 3.3 million sales for the last three months were exactly the same as last year, with no sign of any growth, with software sales down by 18% from the same time in 2021. That’s for the obvious reason that Sony hasn’t release anything new lately, but it’s still got investors spooked.

‘Players are cutting the number of titles they buy on the back of global macroeconomic conditions,’ said chief financial officer Hiroki Totoki via Bloomberg. According to him, not only have Sony not had any new games to sell but sales of older ones are not as strong as they hoped.

‘My biggest apology is that we had to cut our outlook on games for two straight quarters,’ he said.

Sony as a whole saw profits increase by 8% to the equivalent of £2.02 billion, but the gaming division saw its profits fall by a massive 49% to just £247 million.

The primary reason for this was the increased cost of next gen games development, raw materials, and the £2.7 billion it cost to buy Bungie. The high dollar also hasn’t helped, so most of the causes are largely outside of Sony’s control.

Although they’re a bigger company, that can more easily afford to pay for acquisitions, all of these problems are shared by Microsoft, including declining growth in their subscription service. Sony’s PlayStation Plus saw a decline in in users, going from 47.3 million in the previous quarter to just 45.4 million three months later.

That’s despite the recent revamp of PlayStation Plus, although whether that made the situation better or worse is impossible to tell without more information.

Sony has already increased the price of the PlayStation 5 console everywhere but the US and while it would seem madness to institute a second price hike, this may well led to the US suffering the same increase.

Microsoft has already said that it will have to increase the price of its consoles, games, and subscriptions, but has implied that won’t happen until next year.

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