Last quarter, Sony shipped 2.4 million PlayStation 5 units to the market, down 4% from the same period last year (2.3 million), and the console’s total circulation reached 21.7 million units. At the same time, Sony has significantly lowered its revenue forecast for its gaming business, which still provides the lion’s share of the company’s revenue, warning that PlayStation games are not as eager to buy as they used to be.
And if iron sales grew slightly (against the previous year), software sales fell by 26%. In a note to investors, Sony attributed the downturn to a lack of high-profile PlayStation releases this year compared to 2021 and a decrease in time spent playing games overall, as evidenced by a 3% decline in PlayStation Network monthly active users to 102 million. At the beginning of the year, Sony released several exclusives – Gran Turismo 7 and Horizon Forbidden West , but released simultaneously on PC and two generations of PlayStation and Xbox consoles, Elden Ring attracted even more attention – according to GSD , the action-RPG from the authors of Sekiro and Dark Souls is the most popular game in Europe for the first half of 2022.
Sony has revised its full-year revenue guidance for its gaming business down as much as 16% as it expects a further decline in game revenue this quarter and additional costs associated with its recent $3.7 billion acquisition of Bungie .
The disappointing sales of Sony’s PlayStation games are yet another clear indication that the gaming industry is slowing down after its massive growth during the initial stages of the pandemic. Microsoft did not disclose the exact number of Xbox units sold, but last quarter the company recorded an 11% drop in Xbox hardware revenue along with a 6% drop in Xbox content and services revenue, as well as a 7% decline in overall revenue for the gaming division. At the same time, Microsoft, despite a generally strong fiscal year, also warned of a likely decline in revenue from Xbox games and services in the current quarter.
Until recently, Sony predicted by March 2023 to sell a minimum of 18 million PS5 units and reach a total circulation of 40 million – management has not yet revised its preliminary estimate and has not adjusted it, but so far it looks out of touch with reality.
“The supply wasn’t high enough… the demand didn’t drop. We really need to meet the demand, it’s important,” Sony CFO Hiroki Totoki said during an investor call today.
Sony is hopeful that PS5 shipments will improve significantly later this year as it believes the current issues are mainly due to supply chain disruptions rather than component shortages. However, Sony will have to work hard to achieve the goal of 18 million PS5 by the end of the year. That means the company needs to ship more than 5 million PS5 units to market in the remaining quarter — double what it was able to ship last quarter.
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Future game releases should also help boost software sales a bit, with the hotly anticipated God of War Ragnarök (November 9th) and The Last of Us Part I remake (September 2nd) coming out by the end of the year.
While sales of PlayStation games fell overall, digital sales rose to 79% last quarter, up 11% from last quarter. Yes, the pandemic and the digital version of the PS5 contributed significantly to this, but the likely overcoming of the 80% milestone in the digital by the end of the year is quite a significant event.
The number of PS Plus subscribers reached 47.3 million , the same number as in the previous quarter. A year earlier it was 46.3 million. The launch of the updated PlayStation Plus is too early to estimate – let’s see how the number of subscribers will change in the next quarterly report.
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