Sony’s latest financial report shows that PS5’s profitability may be in crisis. With Sony forecasting lower profitability on its PS5 hardware due to changes in promotions across regions and sales channels, production costs may somewhat outweigh sales costs. It’s unclear if Sony is still selling the PS5 console at a profit, or if it will be able to remain profitable through fiscal 2023.
According to the financial report, Sony shipped 3.3 million PS5 units in the first quarter of fiscal 2023 (April to June), slightly lower than expected. In order to increase sales of PS5, Sony lowered the price of PS5 in July this year, reducing its price by about $50 in almost all markets except the United States. A reverse adjustment after the selling price.
Right now, Sony is more focused on meeting its ambitious goal of shipping 25 million PS5 units in fiscal 2023 than on profitability. If this goal is achieved, total PS5 shipments will reach 63 million units by March 2024.
Sony’s financial report also mentioned the impact of sales channel mix on profitability, that is, where the PS5 is sold, and Sony sells it from its direct-to-consumer retail channels (such as the PlayStation Direct store). The PS5 earns higher margins than PS5s sold from retailers such as Best Buy and Amazon.
According to the latest figures, the PS5 has shipped 41.7 million units worldwide, trailing the 43.7 million units shipped by the PS4 during the same period. As for increasing profitability, Sony executive Eric Lempel (Eric Lempel) has said, “We expect (PS5) to be the most successful and profitable game console generation we have ever had.”
