Sony's standard PS5 has become profitable, but the Digital Edition is still being sold...

[jsilva]

In context: Few consoles are profitable immediately after launch, and the PlayStation 5 isn't different. Eight months have passed since PS5 was released, but only now the standard edition of Sony's console has become profitable or rather is not being sold at a loss. As for the Digital Edition, it looks like Sony still has to wait a bit longer before turning a profit.

Sony recently held its Q1 2021 earnings call, where Hiroki Totoki, Sony's CFO, announced that the PlayStation 5 Standard Edition ($499) is no longer sold at a loss. As for the Digital Edition ($399), it still isn't profitable. However, that loss is compensated with hardware sales, including peripherals, accessories and the PS4.

Compared to the PS3, which took four years to become profitable, the PS5 was much faster, taking up just eight months. That's still slower than the six months it took for the PS4 to generate profit, but not by much.

By April 2021, the PlayStation 5 had already sold 7.8 million consoles, increasing to 10 million just last week. Still, Sony plans to sell many more PS5 consoles, increasing the total sales figure to 22.6 million by the end of this fiscal year (March 2021 to March 2022).

But not all is good news in Sony's latest earnings report. The number of PlayStation Plus subscribers decreased to 46.3 million from 47.6 million in the last quarter, as monthly active users have also fallen from 109 million to 104 million.

According to Serkan Toto, CEO of Kantan Games, that's due to the COVID-19 pandemic, delaying the release of many games capable of increasing hardware sales and PlayStation network subscriptions.

Considering the company's expectations, Sony believes the demand for PS5 consoles will stay high during this fiscal year, but the ongoing chip shortage might negatively impact Sony's plans. Some claimed this shortage could well last for another two years, but there's also some who are much more optimistic, expecting to see a few industries normalized by the end of 2021.

Masthead credit: Kerde Severin

Permalink to story.

https://www.techspot.com/news/90672-sony-standard-ps5-has-become-profitable-but-digital.html

 

[Adi6293]

So graphics cards are going up in price because everything is going up in price yet Sony is apparently making some kind of profit on a $449 console? Someone is lying here and I think its NOT Sony.......

 

[QuantumPhysics]

So you mean that even with all that scalping and these things being sold at 4 - 5 times the MSRP Sony is still losing money?

Might as well sell directly to the scalpers.

 

[QuantumPhysics]

During Christmas I managed to get 3 PS5 DISK consoles.

1 for me, one for each of my cousins.

Mine is collecting dust - nothing more than social media flexing along with my Xbox SX.
My cousins like there's but aside from the RPG it's just not that interesting.

I can use the PS5 controller on my PC and play games with the force feedback.

 

[Xex360]

That's still slower than the six months it took for the PS4 to generate profit, but not by much

That piece of junk? It had a very low end APU, slow HDD, nothing special whatsoever?
P.S the Xbox one was even worse.

 

[DoomSlayer]

PS5 Dust Collector is a suitable new name now

 

[NumberSix]

So you mean that even with all that scalping and these things being sold at 4 - 5 times the MSRP Sony is still losing money?

Might as well sell directly to the scalpers.

I know 11 people with a PS5 and by that I mean I actually know them, not some vague internet "friend" and not one of them paid more than the recommended price for one and anyone that did is a god tier berk. I didn't pre-order one for launch but as it was becoming clear the UK was locking down again in November 2020 I put an order in to ShopTo so I had something to do over the winter and 2 days later my shiny new PS5 digital arrived, no hassle and at the retail price of £359.99. Yes scalpers have had an impact but you cannot ignore the impact of the pandemic and the shortage of chips that have lead to supply issues, you cannot supply what you cannot physically make.

 

[Kosmoz]

For at least 1 month (more like 2) now, EU has had many shops with regular restocks at MSRP for PS5.

The neophytes that still scream scalper prices, are either huge ignorants or they are in some exceptionally stock deprived places that don't have them (but these places are fewer and fewer), thus they are exceptions.

No, Sony is not lying when they say they sold over 10mil PS5s already and no, half of them were not bought by scalpers either, most of them are in the homes of gamers.

 

[SirDigby]

So you mean that even with all that scalping and these things being sold at 4 - 5 times the MSRP Sony is still losing money?

Sony only gets what is sold direct and that IS MSRP, so of course they wouldn't see the scalper money.

I put an order in to ShopTo so I had something to do over the winter and 2 days later my shiny new PS5 digital arrived, no hassle and at the retail price of £359.99.

I got mine from JD Williams, PS5 disk version bundled with the new Call of Duty, was something like £515? and about a month later I got 2 emails from BT Shop after registering interest and they gave me 2 access codes to buy, so I bought them at £435 and sold them onto friends for £435.

 

[Bawlsdeep]

I will maybe pick one up in a few years, when Slim version is out and it has matured + exclusives came out.

Next gen so far have been a joke if you ask me.

 

[Bawlsdeep]

If I buy one it needs to have a 4K/UHD bluray drive tho, the Digital version is too expensive and pointless. You will get ripped off in the store unless you buy ONLY during sale and if you have old PS4 games on disc you can't use them. I do.

My PS4 Pro have been great for exclusives and indie games on my 65" OLED. I can see myself picking up a PS5 at some point, not in a rush.

 

[Fulljack]

So graphics cards are going up in price because everything is going up in price yet Sony is apparently making some kind of profit on a $449 console? Someone is lying here and I think its NOT Sony.......

at MSRP, Intel, AMD, and Nvidia are sold all their products on profit, not loss.

at production and fabrication level, the price increase are not that lot by each individual product prices. but after distribution, storage, and sales license, the price are usually get higher by a lot—especially if it sells like hot cake.

I think you need to learn about the difference between bill of material (BOM) and MSRP.

 

[Bawlsdeep]

at MSRP, Intel, AMD, and Nvidia are sold all their products on profit, not loss.

at production and fabrication level, the price increase are not that lot by each individual product prices. but after distribution, storage, and sales license, the price are usually get higher by a lot—especially if it sells like hot cake.

I think you need to learn about the difference between bill of material (BOM) and MSRP.

Does BOM cost include the time spent on designing? Or only materials.

 

[Fulljack]

Does BOM cost include the time spent on designing? Or only materials.

nope, BOM only includes prices of components used to assemble the end products. R&D, licensing, marketing, taxes, and distribution adds a lot of price to the end products, and those are not part of BOM.

 

[Achaios]

For at least 1 month (more like 2) now, EU has had many shops with regular restocks at MSRP for PS5.

The neophytes that still scream scalper prices, are either huge ignorants or they are in some exceptionally stock deprived places that don't have them (but these places are fewer and fewer), thus they are exceptions.

No, Sony is not lying when they say they sold over 10mil PS5s already and no, half of them were not bought by scalpers either, most of them are in the homes of gamers.

Yeah, I thought that what this guy here says is balloney so I went and checked Greece's biggest E-Shop:

Sure enough, cheapest PS5 is 680 Euros.

See for yourself:

https://www.skroutz.gr/c/108/game_consoles/m/2/Sony.html?keyphrase=ps+5

Amazon.de sells PS5 for 1200 euros

Amazon.de : PS5

And ebayde sells PS5 for a median price of 650 Euros

https://www.ebay.de/sch/I.html?_from=R40&_trksid=p2380057.m570.l1313&_nkw=PS5&_sacat=0

 

[Kosmoz]

Yeah, I thought that what this guy here says is balloney so I went and checked Greece's biggest E-Shop:

Sure enough, cheapest PS5 is 680 Euros.

See for yourself:

https://www.skroutz.gr/c/108/game_consoles/m/2/Sony.html?keyphrase=ps+5

Amazon.de sells PS5 for 1200 euros

Amazon.de : PS5

And ebayde sells PS5 for a median price of 650 Euros

https://www.ebay.de/sch/I.html?_from=R40&_trksid=p2380057.m570.l1313&_nkw=PS5&_sacat=0

That's not what I said, I said regular restocks, not non-stop stocks at MSRP in any store.

At least once or twice a month some stores have those restocks. You need to have a Telegram chat bot and Discord channel or Distil Wen Monitor that notifies you when those are live.

I did not say you can go anytime on any store at any hour and it's in stock...

I'm in multiple monitoring groups and I see at least twice a month, if not more in 2-3 stores in my region of Eastern EU PS5 at MSRP.

And then we have even more options with bundles like R&C:RA or other games & extra controllers, etc. Those prices are higher, but are equal to the extra things you get in that bundle, so they are not ripoff scalper prices of just the console alone.

Two months ago, this was not the situation, you could not find stock at all.

 

[Adi6293]

nope, BOM only includes prices of components used to assemble the end products. R&D, licensing, marketing, taxes, and distribution adds a lot of price to the end products, and those are not part of BOM.

Look man AMD and nVidia both have pretty high margins, the only reason prices are up is because they are unwilling to cut that margin a little, I know what BOM is and this works, my point is GDDR6 price went up and this is one of the reasons why RX6600XT has a MSRP of $379 now compare this to a PS5.... A whole system that makes profits at only $70 more, obviously could be charging less they choose not too

 

[Bawlsdeep]

Look man AMD and nVidia both have pretty high margins, the only reason prices are up is because they are unwilling to cut that margin a little, I know what BOM is and this works, my point is GDDR6 price went up and this is one of the reasons why RX6600XT has a MSRP of $379 now compare this to a PS5.... A whole system that makes profits at only $70 more, obviously could be charging less they choose not too

Well consoles make the most money on software sales. Most buyers will spend the same amount as the console itself - if not more - on games and peripherals afterwards.

This is why marketshare matters. More consoles sold = more money will come in from gamesales and peripherals. If this was not the case, Sony and Microsoft would never sell them with a small loss (in the beginning).

Games are more expensive on console for this exact reason; Sony and MS gets a decent cut every time. Price for games even went up with about 10 dollars on average for "next gen" and this is official.