PlayStation’s profit fell 49% in the second quarter due to rising development and acquisition costs. – Discussed

God of War Ragnarok

Sony video game revenue

  • Games and Network Services (G&NS) segment reached 720.7 billion yen ($4.87 billion) in the second quarter of fiscal 2022, up 11.6% from the previous year.
  • game console generated 179.2 billion yen ($1.21 billion) from hardware sales, including revenue from the PS4 and PS5 consoles.
  • The game’s sales were 369.9 billion yen ($2.5 billion).
  • Additional content (DLC and in-app purchases) accounted for roughly 50.8% of that amount, followed by digital (39%) and physical (10%) sales.
  • Network services (PS Network, PS Plus, PS Now and ad revenue) reached 117 billion yen ($791 million).

Other financial results

  • Operating income (profit) of G&NS was 42.1 billion yen ($284.7 million), down 49% from a year earlier.
  • Looking at results for the first half of the fiscal year, operating income fell 42.7% year on year to 94.9 billion yen ($641 million).
  • G&NS revenue rose 5% year on year to 1.32 trillion yen ($8.96 billion).
  • The company also raised its revenue guidance for the full fiscal year ending March 31, 2023 by 10 billion yen to 3.62 trillion yen ($24.4 billion).
  • However, expected operating income was cut by 30 billion yen to 225 billion yen ($1.52 billion).

Why did Sony’s video game revenues fall?

In terms of PlayStation operating profit, the company cited several main reasons for the decline:

  • Increase in game development costs;
  • 17.4 billion yen ($117.6 million), which was expensed on acquisitions made in the first half of fiscal year 2022, including a $3.6 billion deal with Bungie;
  • High share of costs denominated in US dollars due to exchange rates;
  • Decreased sales of non-exclusive games, including DLC.

Reduced hardware loss is the only positive that Sony cites.

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