So as of September 30, 2022, there are 25 million PS5s worldwide, after a quarter with 3.3 million consoles on shelves, the same number as in the same quarter last year. However, we expected more, especially considering that the PS5 took over the US market in August and September, but there was no big take-off.
PS5 production: when Sony keeps it under the pedal
As a result, with 5.7 million PS5s distributed mid-fiscal, Sony has to ship another 12.3 million between October and March to meet the 18 million goal. Despite the road ahead, Sony’s management is confident and revealed a little secret during their conference call: the manufacturer actually released 6.5 million PS5s in the quarter, and therefore voluntarily put a good stock of machines on hold for later. According to CFO Hiroki Totoki, Sony has every chance to exceed the annual target of 18 million. So we can expect a spike in consoles in November/December, but in the meantime, the PS5 is still far behind the PS4, which had a fleet of 29.4 million at the same stage.
In terms of production of PS5 hardware, restrictions on the supply of materials and logistics have been significantly eased, and the number of units produced in the quarter exceeded 6.5 million units, increasing faster than expected.
Hiroki Totoki, Sony CFO
PlayStation Plus: subscriptions fell, not revenue
Other statistics show that the PlayStation is facing some short-term difficulties. Despite the launch of new formulas, PlayStation Plus had 45.4 million subscribers at the end of September, up from 47.2 million a year earlier. The number of active users of PlayStation consoles also fell by 2 million to 102 million. According to Sony, this decline is mainly due to the decrease in the number of PS4 users, which ends up being faster than expected. Interestingly, despite the drop in PlayStation Plus subscribers, subscription turnover is higher than last year (€789m vs. €682m), which no doubt reflects the shift of a certain number of subscribers to the Extra/Premium formulas.
Game sales are also falling, which Sony prefers to chalk up to the disappearance of containment rather than a sluggish release catalog. Between July and September, 62.5 million PlayStation games were sold, up from 76.4 million the previous year. There are 6.7 million PlayStation Studios games in the lot (compared to 7.6 million last year), given that this period includes the launch of The Last of Us Part I. But although the number of games sold is lower, game sales revenue ( packed and downloaded) increased. Sony explains that favorable exchange rates actually offset the drop in sales of third-party games and additional content. In addition, the dematerialized one is still progressing a little more (63% against 62% a year earlier).
PS5 price increase limits breakages
Sony Interactive Entertainment’s quarterly revenue rose 12% (€4.9bn vs. €4.4bn), a record for any manufacturer in the second quarter, but operating profit disappoints with a 40% drop (€286m vs. €562m) . . PlayStation has also revised its goals for the annual fiscal year and expects lower than expected earnings (1.5 billion euros instead of 1.7 billion euros). It’s a rare fact that video games wouldn’t then be the group’s top-grossing business in the fiscal year, an honor that goes to Sony Music, which is aiming for a €1.8 billion profit.
Sony attributed the decline in video game profits to a combination of factors, namely a drop in sales of games and additional third-party content, an increase in the costs of developing its games, and the impact (this time negative) of interest rates on the stock exchange. rate, but also accounting for the costs associated with its acquisition, including the acquisition of Bungie. The only positive factor in this table: lower losses associated with console sales. In other words, the much-discussed PS5 price increase was meant to limit damage in the face of a very real drop in profits. A profit that nonetheless remains far higher than what Sony earned on its previous consoles.
“On hardware profitability, we expect a slight improvement from previous forecasts due to price changes and lower costs, partly offset by the negative impact of foreign exchange rates. On software profitability, we have lowered our forecast as we believe it will take more time for engagement to recover from its current low levels,” says Hiroki Totoki.
For the Sony Group as a whole, the results of the quarter are very positive: turnover was 18.7 billion euros (+16%), operating income was 2.3 billion euros (+8%), and net income was 1.8 billion euros . (+24%). The Group also decided to revise its forecasts upwards for the entire financial year, betting on turnover of €79 billion, operating income of €7.9 billion and net income of €5.7 billion.
Also read | PS5: With rising prices, Sony is protecting its profits first