Sony’s standard PS5 has become profitable, but the Digital Edition is still being sold at a loss
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