Sony is making lesser consoles but selling more games.
According to reports Sony's PS5 shipments came in at 2.6 million in second quarter, down from four million in the same quarter last year. Total shipments stand at 97.9 million.
Game & Network Services earnings rose 9% to ¥1.2 trillion, roughly $7.5B. Operating income rose 83% to ¥220 billion, about 1.3 billion.
Last year’s quarter carried a one-time loss of ¥49.8 billion including a 765 million dollar Bungie impairment. If we remove those out and the underlying increase is 29%, which is still a strong quarter.
Where the money came from
Some of the highlights
- Game software revenue up 12.5% to ¥708.5 billion
- Physical software up 21.7% to ¥43.1 billion
- Network services up 19.7% to ¥218.3 billion
- Full-game unit sales of 88.2 million, up from 80.3 million, including 8.2 million first-party
- PS Plus monthly actives at 127 million, up from 119 million, a record for September
- Hardware revenue down 4.8% to ¥219.7 billion
Digital downloads now make up 78% of full-game software sales, which was a concern among gamers.
Marvel’s Wolverine sold 2.4 million copies as of 4 November, roughly 50 days after its 15 September launch. Reception was mixed, though Circana ranked it the best-selling game in the US in September. Against a reported 300 million dollar budget, 2.4 million units is a figure Sony will want to see keep climbing.
The memory answer
CFO Lin Tao stated that Sony “able to offset the rise in memory prices” for PS5 hardware “through adjustments to promotions and pricing, as well as additional cost-reduction.”
“Regarding memory procurement for next fiscal year, based on discussions held so far with various suppliers, we have aligned on the quantity of memory needed for our projected hardware unit sales.”
Sony’s own filings are more cautious, noting it expects to be affected by increased prices and supply shortages and plans to manage profitability by flexibly adjusting unit sales and promotions. Which reads, in practice, as being prepared to ship fewer consoles rather than eat the margin.
That’s a different position from Microsoft, whose internal projections put the next Xbox at 1,200 to 1,800 dollars on a roughly 3% margin, and whose current console has risen in price three times in 13 months.
The forecast
Full-year G&NS sales forecast increased 6% to ¥4.8 trillion, around 30.3 billion dollars. Operating income forecast raised 6% to ¥700 billion, about 4.4 billion.
Tao attributed the increase to higher third-party software and network services sales plus reduced costs. Sony’s own breakdown also notes a negative: lower first-party software sales, mainly due to a change in a title release date. No indication which.
Group net profit rose 44% to ¥449.6 billion, with group operating income up 45% to ¥622.3 billion, both ahead of analyst expectations. Spider-Man: Brand New Day took 2.52 billion dollars at the global box office.
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