Sony’s PlayStation 5 is off to a flier, with over 4.5 million PS5s shipped in the final months of 2020 and expectations that their PlayStation business will have its best ever year in terms of revenue and profit.
This is actually despite Sony admitting in their financial results that the PS5 is being sold at a loss – a fact that is thoroughly unsurprising and follows the typical games console business model. Backed up by 1.4m PS4 consoles sold between October and December, Sony’s Games and Network Services division was still able to spin $8.3bn in revenue, making a 40% increase year-on-year.
The real driver of all this revenue was game sales, which made $4.6bn thanks to $1.76bn in digital game sales and $2.43bn in add-on content and microtransactions. PlayStation Plus subscriptions have also increased by 22% year-on-year to a new total of 47.4 million subscribers.
All together, Sony have increased the full-year forecast for their gaming division to $25 billion, with $3.2 billion in operating profit.
Facing sky high demand for their new console, the PlayStation 5’s 4.5 million units is actually exactly in line with the 4.5 million PlayStation 4 consoles shipped from its launch in November 2013 to the end of the year. So, while it might have managed to surpass the PS4’s 2.1 million units in two weeks in 2013 to become the largest launch in PlayStation history, the PlayStation 5’s potential to set new records for games console sales seems to be limited by Sony’s ability to actually supply consoles. More consoles have appeared on sale through January, but we’ll discover how many in April/May.
That ability is being hampered by issues surrounding the fabrication of new chipsets for the consoles. Produced at TSMC 7nm fabs, under contract from chipset development partner AMD, the supply chain has been under severe strain through 2020 to match demand. There’s a juggling act to satisfy the demand of PlayStation 5, Xbox Series X, Xbox Series S, as well as AMD’s new Ryzen 5000 series CPUs and Radeon 6000 series GPUs. Microsoft have stated that they expect the Xbox Series X to remain in short supply until at least July and we can likely expect a similar situation to apply to the PlayStation 5.
Looking at the company’s last generation, the PlayStation 4’s holiday sales have seen a significant drop year-on-year, dropping from 6 million between October-December 2019 to just 1.4 million in the same period last year. This puts lifetime shipments at 115.4 million, and the shipments in the 2020-21 financial year at just 5 million so far and on track to come in at less than half the console’s 2019-20 shipments of 13.4 million. With so many consoles already out there, it will remain a major part of Sony’s business for years to come, but such a drop in production means we can put any thoughts that the PS4 could overtake the PS2’s 155 million lifetime sales to one side.
Source: Sony
