PS4 sales continue to decline as PS+ users and at-home digital game sales surge

Bottom line: Sony’s first-quarter financials are about what one would expect with the company about to head into its maiden voyage in next-generation waters. PlayStation 4 sales were down, games sales and PlayStation Plus subscriptions were up, and digital game sales beat brick-and-mortar 74 percent to 26 percent, respectively. Companywide sales and operating income are up by two percent year-on-year.

On Monday, Sony published its Q1 results for the 2020 fiscal year (April 1 – June 30). It looks pretty good overall for the company with consolidated sales and operating income reaching nearly 2 trillion yen ($19 billion US). That is a two-percent uptick year-on-year.

In what is the last stretch of its manufacturing cycle, PS4 sales were understandably down, selling only 1.9 million units—a 40-percent decline YoY. Although unit sales did not improve its ranking, at 112 million lifetime sales, the PS4 is still the second best-selling full-sized video game console of all time trailing only behind the PlayStation 2. If you include handhelds, PS4 lags about 6 million units behind third-place Game Boy and Game Boy Color.

Despite the expected dip in hardware sales, subscriptions to Sony’s PlayStation Plus were up significantly, adding 3.5 million new users, bringing its base to 45 million subscribers. Global lockdowns have likely contributed to the increase, and the $1,200 COVID-relief checks issued in the US probably prompted many stay-at-home workers to splurge on the $60-per-year subscription.

The pandemic is also likely for physical game purchases to be down while digital sales were up. Nearly three-quarters of game sales were from the PlayStation Store as opposed to retail outlets (74- to 26-percent).

Since Sony has not even opened the PlayStation 5 for pre-orders, it is no surprise that it had no numbers or forecasts for PS5 sales. However, the report does mention that the next-gen hardware will not be delayed.

“Regarding the launch of PlayStation 5, although factors such as constraints due to employees working from home and restrictions on international travel remain, necessary measures are being taken and preparations are underway with the launch of the console scheduled for the 2020 holiday season. At this time, no major problems have arisen in the game software development pipeline for Sony’s own first-party studios or its partners’ studios.”

Sony forecasts that game and network services will increase significantly after the PlayStation 5 launch, but that those gains will leave operating income flat due to the increased expenses incurred during the console debut. Next-gen hardware is typically sold at a loss in the beginning, so this is not surprising.

Image credit: Dark-Lit PS Logo by Djordje Novakov, PlayStation 5 by Aldeca Productions

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