Sony lowers profit forecast as PlayStation game sales fall

midian182

Posts: 8,330   +103
Staff member
What just happened? Sony is the latest company to feel the post-lockdown effect. The Japanese giant has revised its annual profit forecast on the back of weaker software sales, which have fallen 26% year-over-year due to a dearth of big PlayStation releases in 2022.

In its latest earnings report, Sony lowered its profit forecast for the year by 16 percent from the 305 billion yen ($2.3 billion) it predicted in May to 255 billion yen ($1.9 billion). Part of that comes from the $3.7 billion acquisition of Bungie, but it's also the result of "an expected decrease in sales of first-party titles." The Verge notes that while excellent PlayStation exclusives Horizon Forbidden West and Gran Turismo 7 did arrive in 2022, they had to compete against the multi-platform Elden Ring.

Sony sold 47.1 million games for the quarter ending June 30, 2022, 6.4 million of which were first-part titles. That's a significant drop from the 63.6 million games and 10.5 million first-party titles it shifted during the same quarter a year earlier.

It was also bad news for the PlayStation Network, which fell to 103 million active monthly users, down 3% YoY from 105 million. PSN subscribers were at 47.3 million. That's a year-on-year increase from 46.3 million but down from the 48 million reported in fiscal Q3 2021.

PlayStation 5 console sales, meanwhile, were up by only 4% YoY in the quarter to 2.4 million units, bringing total lifetime sales to 21.7 million. That puts the console's lifetime sales around the same level as the Nintendo GameCube.

The report also shows that digital versions of games keep taking more sales from their physical alternatives. The quarter saw 79% of PlayStation games sold digitally, up 11% YoY, helped by the digital-only PS5. The industry has been moving in this direction for years, affecting retailers like GameStop.

Sony's game sales for the rest of the year should pick up the pace. In addition to the launch of God of War Ragnarök and The Last of Us Part 1 remake, we can expect the usual uptick over the holiday season. But Sony will be hoping it can meet the still-strong demand for PS5 consoles. "Supply has not been sufficient [...] demand has not gone down. We really need to meet the demand, that is the important thing to do," said Sony CFO Hiroki Totoki in an investor call.

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kira setsu

Posts: 409   +390
OR you could lower game prices, $70 for remakes is too much and modern games rarely have enough content or are polished enough to charge $70.
70 is fine, I'd rather pay a lump sum than have em lop off a bunch of content and hide it behind dlc and other shenanigans.

maybe sony just doesnt have the same roster of games to go after them now, I was an uncharted fiend and now its gone, plus most games now will hit pc if you wait and I can use trainers and have infinite replay value there.

sorry sony but tlou can only take you so far.
 

Old Molases

Posts: 211   +42
Running after money will only make it go away. Quality and brand loyalty matters too. People are Sony for good just cause their cries go unheard.
 

winjer

Posts: 486   +2,223
After 2 years with people stuck at home, the gaming and video streaming industry saw massive rises in revenue and profit. But now, with few restrictions, people are back to spending money on other things. The market is going back to pre 2020 levels.
 

Faelan

Posts: 183   +240
But now, with few restrictions, people are back to spending money on other things. The market is going back to pre 2020 levels.
Isn’t there a chance it could get even worse?

With the price of everything going up, people may think twice about buying another $70 remake, especially if it involves also buying new hardware to run.

I have enough untouched games in my Steam library that will run just fine on any of my two systems to keep me going for a year without even buying any new games or hardware, should food and everything else become so expensive that I can’t justify more toys for my entertainment. Would I like more toys in my future? Sure, but I don’t -need- to go there for a while.
 

winjer

Posts: 486   +2,223
Isn’t there a chance it could get even worse?

With the price of everything going up, people may think twice about buying another $70 remake, especially if it involves also buying new hardware to run.

I have enough untouched games in my Steam library that will run just fine on any of my two systems to keep me going for a year without even buying any new games or hardware, should food and everything else become so expensive that I can’t justify more toys for my entertainment. Would I like more toys in my future? Sure, but I don’t -need- to go there for a while.

Yes. You are right.
With inflation sky high in most countries, people will spend less on non-essential goods. Gaming is a prime candidate to cut spending in the household.
 

Theinsanegamer

Posts: 3,778   +6,619
So, sony....listen. You know how we keep hearing how great the demand is for PS5s? Are people just staring at their home screens, or are you actually having production issues. Because these sales tell a very different story then sony PR.
Isn’t there a chance it could get even worse?

With the price of everything going up, people may think twice about buying another $70 remake, especially if it involves also buying new hardware to run.

I have enough untouched games in my Steam library that will run just fine on any of my two systems to keep me going for a year without even buying any new games or hardware, should food and everything else become so expensive that I can’t justify more toys for my entertainment. Would I like more toys in my future? Sure, but I don’t -need- to go there for a while.
Gaming got hit hard in the 2008 recession too.
70 is fine, I'd rather pay a lump sum than have em lop off a bunch of content and hide it behind dlc and other shenanigans.

maybe sony just doesnt have the same roster of games to go after them now, I was an uncharted fiend and now its gone, plus most games now will hit pc if you wait and I can use trainers and have infinite replay value there.

sorry sony but tlou can only take you so far.
The entire farce that was TLOU2 really summed up modern sony: chasing something to please the 1% of twitter yodelers while ignoring what the rest of their audience wanted. Jack up the prices of games because "muh profit margins" and shovel in as much microtransaction sludge as possible (GT7). Then re-relase your older game that you praised for pleasing the blue bird in two $70 parts years later like you're gonna pritn a mint with it.

Then be surprised when your sales go down. Read the room sony, people dont have money like they did in 2019 and 2020.
 

NumberSix

Posts: 175   +281
Ive not bought a single PS5 game since getting one at launch, I just pick up the "free" PS+ games and use it as a very quiet PS4.
 

Watzupken

Posts: 703   +592
I don’t know how many potential PS5 buyer actually got a PS5. Sony keeps claiming very high demand, but all I see in my country are scalper listing. I went to an official Sony store to get a sense of the backlog, and the person told me that there are thousands on the waiting list. So the estimated time I can get one is towards the end of the year. With PS5 sitting in scalper’s home or store, it gives a false impression that demand for the console is great, but yet, does not translate to demand for games of course.
 

Nobina

Posts: 3,964   +4,554
I like that Sony is releasing more games to PC, but that has to negatively impact PS5 and its game sales. People will simply opt for the PC version due to the overall better experience.
70 is fine, I'd rather pay a lump sum than have em lop off a bunch of content and hide it behind dlc and other shenanigans.

maybe sony just doesnt have the same roster of games to go after them now, I was an uncharted fiend and now its gone, plus most games now will hit pc if you wait and I can use trainers and have infinite replay value there.

sorry sony but tlou can only take you so far.
It's not fine because games don't have to be $70. They started taking out main content and putting it behind a DLC years ago when games were cheaper for the reason of making more money. Now, keep in mind these companies still rake in billions of dollars, there is no "need" to make them more expensive, it's just pure greed. They were making money before when games were $60 and complete but they want to get to that next step every year and make even more. Now they're partitioning main content into DLC, charging full price + in-game purchases which used to be a free-to-play model. The vast amount of extra money they make goes to some greedy CEO anyway.

PC will always > Console. This is the way
Because a console is just a mutilated PC that cannot be upgraded, something like a laptop, hence it will be left in the dust in a couple of years, performance-wise. The benefit of consoles is that you pay for a PS4 once and you use it for a few years without spending anything on hardware and you still get a decent experience.
 

neeyik

Posts: 2,270   +2,743
Staff member
I like that Sony is releasing more games to PC, but that has to negatively impact PS5 and its game sales. People will simply opt for the PC version due to the overall better experience.
Possibly, but I suspect unlikely. A PC-version sale for Sony (as the publisher) is still a sale. Probably generates less revenue than the fee they drawn from PS5 game sales, but it's still income.

As for the hardware side of things, I should imagine there significantly fewer people who will look at a game, but don't have a PS5 or PC to play it on, and then decide that they'd prefer to spend two, three, or more, times more money on a PC, compared to those preferring to go with a console.

Since it's launch in November 2020, Sony has sold something like 20 million PS5s. In 2021 alone, over 340 million desktop, laptops, and workstations were shipped worldwide. Clearly a lot of those will be low end laptops, and not used for gaming, but given that PC sales outnumber PS5 sales by a huge margin, if Sony thought for one moment that releasing PS-exclusive titles on PC would hurt their revenue, they wouldn't have entertained the idea.

I'd argue that since Sony are bringing more titles to the PC platform, the move has been a financially sound one.