Sony expects PS5 sales to gradually decline as the console has entered the second half of its console cycle.
Yesterday, Sony published its most recent financial results, revealing that 59.2 million PS5 consoles were sold. This number is slightly below the revised forecast that Sony set some months ago, and also slightly below time-aligned PS4 sales. Although Sony managed to sell slightly below its own expectations, the PS5 still managed to sell five times as many units as the Xbox Series consoles during the fourth quarter of the fiscal year. At least, that's what analyst Daniel Ahmad from Niko Partners has estimated.
During the conference call with investors, Sony talked about PS5 sales with the company's financial General Manager, Sadahiko Hayakawa, saying that the PlayStation business model has significantly changed since the release of the console's predecessor - the PlayStation 4. In previous generations, including that of the PS3, Sony was focused on increasing software sales in relation to new hardware. According to the executive, the PS4 console cycle can be seen as a transition period to a business model focused on platform playtime. "Looking at the console cycle, we think that PlayStation business model has changed significantly since the launch of the PS4", Hayakawa told investors. "The business model up to and including the PlayStation 3 was focused on increasing the number of software units sold in relation to newly sold hardware for each console generation. After a transition period during the PS4 generation, the PS5 model has shifted to where playtime on platform has increased due to expansion of the user community beyond console generations. Due to this change in business model, during the PS4 for generation, we were able to significantly grow profits in this segment, thanks to rapid digitalization and the expansion of network services."
According to the General Manager, the PS5 has capitalized on the installed user base, and Sony believes that PS5 sales will gradually decline during the second half of the console cycle.
"In the PS5 generation, which has capitalized on the established user base, the trend is hard to see due to the impact of stay-at-home demand and acquisition-related expenses. But since the launch of the PS5, we have continued to achieve a high level of a more stable profit growth. As we enter the second half of the console cycle, we expect the number of new PS5 units sold to gradually decline. However, by steadily maintaining and expanding the consistently increased number of active users and user engagement while also strengthening control over business costs, we believe that we will be able to steadily increase sales and profits on the PS platform going forward."
As also mentioned by Hayakawa during the conference call, Sony aims to further grow sales for PlayStation Studios first-party games. "And by doing so, we plan to achieve a new record high in profits in this segment during the fifth mid-range plan", the executive said.
What are your thoughts on this? How will PS5 sales evolve in the years to come? How long will this console cycle last? Hit the comments below.
About the author: Passionate gamer since the NES era and begun writing about games in 2014. Joined Wccftech gaming section in 2015. Has owned every console since then. Can never make up his mind on what console to play. Weird sense of humor but can be funny from time to time.
Follow Wccftech on Google to get more of our news coverage in your feeds.
