For fans of Sony and the PlayStation brand, Valentine’s Day 2024 was anything but a lovely day.
On Wednesday, Sony dropped its “Q3 FY2023 Consolidated Financial Results” (the report encapsulates Sony’s business from Sept. 31, 2023, to Dec. 31, 2023) and the information offered doesn’t provide the rosiest outlook for Sony and its PlayStation 5, as well as other tech ventures.
One of the first pieces of information in the report: The PS5 sold well enough… but failed to hit some lofty expectations.
“PS5 hardware unit sales in the quarter were 8.2 million units, which fell short of the target to hit our annual shipment target of 25 million units, but was a record high number of quarterly unit sales for PS5, and PS5 cumulative sales have exceeded 50 million units,” the report stated.
It further added: “Based on the results for this quarter, PS5 unit sales for this fiscal year are expected to be around 21 million units.”
Okay, so the PS5 didn’t sell as well as expected by about four million units… but the bad news doesn’t stop there.
When the report broached the outlook for the PS5 in the coming year, Sony’s report made it clear that its latest home console system would be slowly — but surely — trudging into the sunset.
“Regarding the PS5 hardware, which will enter its fifth year since launch, partially due to its entering the latter half of the console cycle, we aim to optimize sales with a greater emphasis on the balance with profits, so we anticipate a gradual decline in unit sales from next fiscal year onwards,” the report states.
“Latter half of the console cycle” certainly reads like a cycle that’s closer to ending than starting, and certainly won’t do any favors to slow down the rampant rumors about a pending PlayStation 6.
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Due to that, Sony expects a “gradual decline” in console sales.
Perhaps more worrying than the console decline is the expected decline in software sales — and that one is an intentional decision by Sony.
“Regarding first-party software, we aim to continue to focus on producing high-quality works and developing 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 Marvelʼs Spider-Man,” the report states.
The report follows up by saying that the decline in software sales will mitigate some production costs, but that is unlikely to offset the actual sales slippage.
But it’s not just the report that’s casting a bit of a cloud over all things PlayStation.
At a financial call obtained by IGN, Sony head honcho Hiroki Totoki admitted that PlayStation has not been operating particularly efficiently.
“I’m trying to demonstrate leadership, and trying to have as many meetings as possible with the management team,” Totoki said, per IGN. “Also visit studios. 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, or increasing margin, 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 am concerned, I’m trying to understand what is happening in the company, in the industry, and also the perspective of analysts, and try to explain in a transparent manner so people can recognize and notice these issues, so we can have a harmonized approach going forward. That is a very general comment since I became the chairperson.
“There are concrete points, which I will not go into today.”
Totoki then continues by discussing his meetings with the Playstation brand, in general.
“Now, about visiting the studios, I’ve had meetings with leaders at the studios,” Totoki added. “People who work in the studios are very highly motivated, they’re very good people, and they’re very creative people, they have great creative minds, and they also have knowledge about live streaming.
“However, having said that, when it comes to the business itself, I think there is room for improvement. And that has to do with, how do you use the money? Or about the schedule of development, or how to fulfill one’s accountability towards development. Those are my frank impressions.
“So I will continue to engage in dialogue with the people so we can find the right way to proceed.”
