Game news But what is happening with the PS5? No internal video games before 2025, a console at the end of its cycle, 10 billion losses estimated on the stock market. We take stock!

Game news But what’s going on with the PS5? No internal video games before 2025, a console at the end of its cycle, 10 billion losses estimated on the stock market. We take stock!

If mid-February was marked by the new strategic choices of Xbox, on the PlayStation side, things are also stirring – and not necessarily in a good way! As we can learn from the results for the 3rd quarter of fiscal year 2023, the PS5 will not reach the target of 25 million units sold in the current financial year (which ends next month). The latest news is that this fiscal year, Sony has sold “only” 16 million copies of its console… The ambition has therefore been reduced. The Japanese company now plans to deliver 21 million before March 2024.

See the PS5 Slim on Amazon

A trend that PlayStation is applying to the coming months of the PS5… The manufacturer plans, in fact, a “gradual decline in sales” of the machine from the next fiscal year (from April 2024 to March 2025) while still putting the emphasis on “balance with profits”. For good reason, as Sony notes: the home console will soon enter its 5th year of marketing and in the “second half of its life cycle”, which has also been described as his “final step”. What’s more, the company does not plan to release any major game – like Marvel Spider-Man 2 or God of War Ragnarok – before at least April 2025. In short, nothing to reassure observers. As a result, Sony’s stock price fell by $10 billion (calculations of CNBC).

Red alert at Sony?

So, is it all disaster at PlayStation? Well, not really. First of all, you should know that 2023 was the biggest year for the PS5. From January to December last year, the machine sold 22.7 million copies worldwide… An increase of 53% compared to the same period in 2022. “This is the best year in the history of PlayStation since the 24.2 million PS2s in 2002”, note on Oscar Lemaire – well-known analyst among industry players. “The PS5 is helped by a catch-up effect after two years of shortage”. On the game sales side? This is “very high level”.

Where the problem lies is that performance is not there in the last quarter of 2023 (Christmas, always super important). “Only” 8.2 million PS5s found buyers there while at the same stage, the PS4 made 9.7 million – reports Oscar Lemaire… Overall, moreover, although the new PlayStation achieved the biggest console launch ever (however hampered by the shortage) and still displays robust sales to this day, compared to the PS4, we are a little behind. If the PS5 displays nearly 55 million units sold at the end of 2023, that is to say a little more than three years after its marketing, its big sister exceeded 57 million over the same period.

When it comes to nothing

In short, no one died, but the failure to achieve its objectives was never welcomed with open arms (hence the fall in the stock market). Overall, Sony seems to have seen a little too broad for its home console in 2023-2024, motivated by a previous financial year (2022-2023) which ended at 19 million PS5s instead of the 18 million initially planned ! This time, we will go back for the 25 million, which does not mean that the 21 million before next month will fall out of nowhere. We’re still talking about a little less than 5 million copies in three months… All in all: there is a form of urgency, which pushes Sony to deploy discounts to stay on track. At the end of February, for example, the PS5 Slim Standard Edition – with disc reader – is 10% off (-€75) on Amazon.

Discounts which also do not necessarily send the right message. If PlayStation reaches 21 million PS5s in March with a lot of reductions, ultimately the margins | the profits will necessarily be lower ! Afterwards, the money collected thanks to the hardware is peanuts facing the real crux of the matter: the sale of services and games. This is clearly “where the money is”. And this last model (the console as a flagship product to sell exclusives) is still very present on PlayStation, even if it is bound to evolve… Except that this strategy also has its limits.

The culmination of a model

Because beyond all this story of missed objectives and PS5 at the end of its life (which does not at all exclude the arrival of a Pro model by the way), analysts surveyed by CNBC are concerned about something else: Sony’s gaming margin, that is to say the difference between production costs and the purchase price. According to the American media, this margin was 6% last December (compared to 9% in December 2022 and 12-13% at the start of the same year). If CNBC sources are to be believed, this index would be at its lowest in “a decade”. You see the cause coming: the production costs of games, which have exploded in recent years. According to KotakuSpider-Man 2 is $300 million.

A problem that Hiroki Totoki, financial director of Sony | interim president of PlayStation (following the departure of Jim Ryan), has in mind… In a question-and-answer session held after the announcement of the company’s results, the man says he would like to be “aggressive” to improve the margins of PS5 games. “If you have first party content (not only on our console but also on other media, like PC) it can be developed on multiple platforms, and this can help improve profits,” he says. A route taken by a certain Helldivers 2, a new service game published by PlayStation and released simultaneously on PS5-Steam. It recorded a peak of 400,000 simultaneous players on the Valve store, a record for a Sony title on PC.

Even if the long-term success of Helldivers 2 is not yet certain, the popularity of PC gaming is going in the right direction for the Japanese company! As a reminder, PlayStation plans to release six service games by 2025-2026. A way to cope with increasing production costs – with experiments designed to bring in money in the long term (Fortnite). We are undoubtedly at the dawn of a new strategy for Sonywho will have to move away from the model of the excluded at all costs.