Sony has announced its Q3 financial results for the three months ending December 31, 2023—and it revealed a lot beyond sales numbers. The company announced that PlayStation 5 has now sold 54.7 million units. However, it lowered its sales forecast for the year after falling behind its lofty PS5 sales target.
Sony Interactive Entertainment (SIE) set the ambitious target of selling 25 million units of PlayStation 5 for the fiscal year ending March 2024. However, in Q3 it sold 8.2 million units which brings the total sales in the current fiscal year to 16.4 million units. The company’s new target is 21 million, 4 million units short of the initial target.
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Sony Corporation expects to rake in ¥210 billion (approx. $1.4 billion) from its Game & Network Services segment (a downward revision of 5%) this fiscal year. The downward revision was blamed partly on declining sales and rising losses from hardware sales due to promotions.
“Regarding PS5 hardware, which will enter its fifth year since launch,” said Sony president, COO and CFO Hiroki Totoki. “Partially due to entering the latter half of the console cycle, we’re aiming to optimize sales with a greater emphasis on balance with profits. So, we expect a gradual decline in unit sales from next fiscal year onwards.”
“Regarding first-party software, we aim to continue to focus on producing high-quality productions and producing live service games. But while major projects are currently under development, we do not plan to release any new major existing franchise titles next fiscal year like God of War: Ragnarök and Marvel Spider-Man 2.”
Most parts of Sony’s business experienced growth in Q3. For example, software sales across PlayStation 5|4 rose to 89.7 million, a 3.2 million increase year-over-year. Also, digital sales accounted for 66% of game sales in Q3, a 4% increase compared to the same time last year.
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Talking of software sales, Sony revealed that Marvel’s Spider-Man 2 has now sold 10 million units while the entire series has sold over 50 million units across consoles and PC. Like software sales, Sony’s Network services experienced a bump in revenue.
The network services which include advertising and PS Plus revenue hit a new high. Last year when the service was revamped, Sony raked in ¥122.2 billion (approx. $812 million) from its network services. According to the Q3 financial report, that figure has now jumped to ¥137.1 billion (approx. $911 million).
PlayStation Network’s monthly active users (MAU) was not left out of the party. The active monthly users on the platform hit a new high of 123 million, an increase of 11 million year-on-year. According to Sony, the MAU is the estimated total number of unique accounts that used the service or played games on the PlayStation Network in the last month of the quarter.
New PlayStation chairman wants studios to improve “when it comes to business”
Totoki was asked to give his early assessment of working with the games business during the earnings call on Wednesday, February 14, 2024. He said he believes Sony’s studios can improve “when it comes to business”. Totoki assumed the role of chairman of SIE in October last year ahead of Jim Ryan’s retirement. He will act as interim CEO of SIE from April 1, 2024.
Totoki said he made it a duty to attend management meetings and visit PlayStation’s game development studios to better understand the business. While he was impressed with the creativity and motivation of studio workers, he believed there was “room for improvement”, especially in terms of how they invest money and plan development schedules, to enable the entire business to achieve its growth goals.
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“It’s been about four months [since I became Chairman] and I’m trying to demonstrate leadership and have as many meetings as possible with the management team,” Totoki said through a translator to the listening web call audience. “I’ve also visited studios, and everyone is working really hard to fulfill their responsibility to try to optimize the business, and I understand that.”
“But overall growth and sustainable profitability for increasing margins… how will that translate to these goals? I don’t think people understand that deeply. I think that is the problem of the organization.
So, as far as I’m concerned, I try to understand what is happening in the company, in the industry, and also from the perspective of analysts, and try to explain that in a transparent manner so that people can recognize and notice these issues so that we can have a harmonized approach going forward. People who work in the studios have very high motivation.
They’re very highly motivated, they’re very good people, and they have great creative minds and knowledge of live streaming. However, having said that, when it comes to the business, I think there is room for improvement.
And that’s to do with how to use money, the schedule of development, and how to fulfill one’s accountability towards development – those are my frank impressions. I will continue to engage in dialogue with the people so that we can find the right way to proceed.”
