Sony Says PlayStation 5 Generation Is Its Most Profitable Console Generation to Date

There isn't much information being gained from subtracting the cost of the acquisition without also subtracting the additional revenue Bungie provides because otherwise you're just giving Sony free money and that will of course make their financials look better.

I agree but Bungie have yet to bring any substiantial revenue since aquisition. They also have expanded to 1600 employees, almost doubling the count since 2021.
 
Increases profitability of their 1st party titles, which have increasing production costs

Yes but that means that they in the long run risks the high profits from owning their own walled garden, it sounds like very short term thinking. If playstation 5 is their most profitable generation ever, it makes little sense in bringing their games to PC. Profits is already up, they should be preparing to set the stage for playstation 6 or ensure a very long generation for PS5.
 
Yes but that means that they in the long run risks the high profits from owning their own walled garden, it sounds like very short term thinking. If playstation 5 is their most profitable generation ever, it makes little sense in bringing their games to PC. Profits is already up, they should be preparing to set the stage for playstation 6 or ensure a very long generation for PS5.

It's the most profitable gen cycle, it's not just PS5.

The numbers shows that launching games on PC are working in their favour.
 
Xbox went PC day 1 and still have to release their games some years later to their biggest competitor as well, so even that shows that PC day 1 isn't something that leads to massive increase in software sales. If that were the case why isn't PC day 1 enough for Microsoft?

According to PC gamers the PC market is so much bigger than the console market. And yet Microsoft both have their own console and the PC market but still have to port over their games to other consoles as well? Doesn't seem that huge of a market, judging from that fact alone.
 
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As for june 11, 2017 PS4 sold through totaled 60.4 million units. PS4 achieved those sales in 1304 days (release date: november 15, 2013).
If I'm reading this slide correctly, as for March 31, 2024 PS5 sold through totaled 56 million units. PS5 achieved those sales in 1235 days (release date: november 12, 2020).
I'm not sure it's a FY or april 30, 2024. But even if it's a FY, it doesn't seem realistic to me that PS5 can cover the 4,5 million sold through difference in 69 days.
Isn't a 4.4 million sold through gap is too big?
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What I don't understand is if playstation is doing so well, why are they diluting their brand with putting their software on PC?

Why would you be sure its diluting in a significant way? Just like consoles, there are a subset of gamers that will always stick with PC. Sony likely wants to make its IP even more popular among that crowd as well as upsell a future PS console.

Sony has more data than us here, the ideal scenario is notable more profits, expanding IP popularity with little cannibilisation.
However its very hard even for Sony to determine conclusively if there is little cannibilisation and how much conversion is happening.

PS5 being close to PS4 while being $200 more likely still tells Sony that cannibilisation isn't an issue.
 
And it’s by far the worst console PS ever designed vs one where they really didn’t make any glaring mistakes.

The PS5 was designed from the ground up to be a smooth transition from PS4. Not really a matter of luck.

Just the simple fact that it’s fully backwards compatible highly changes the dynamic between generations. The same thing will happen with the switch 2
 
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I think ps6 will release on 2028
8 years gen like the switch
If it's more convenient in terms of what you and CPU are being developed Sony might even go 2029/30. Why not. PS4 still holds up today and it's 4 year's into next gen. A 2 year increase wouldn't hurt. Personally I'd go with 2029.

Fantastic news. You really want Sony breaking their profit records especially with MS one foot out the door.
 
Xbox went PC day 1 and still have to release their games some years later to their biggest competitor as well, so even that shows that PC day 1 isn't something that leads to massive increase in software sales. If that were the case why isn't PC day 1 enough for Microsoft?

According to PC gamers the PC market is so much bigger than the console market. And yet Microsoft both have their own console and the PC market but still have to port over their games to other consoles as well? Doesn't seem that huge of a market, judging from that fact alone.
PC gamers have different tastes compared to console gamers. It will always depend on the type of game whether the PC version will be successful.
 
Xbox went PC day 1 and still have to release their games some years later to their biggest competitor as well, so even that shows that PC day 1 isn't something that leads to massive increase in software sales. If that were the case why isn't PC day 1 enough for Microsoft?

According to PC gamers the PC market is so much bigger than the console market. And yet Microsoft both have their own console and the PC market but still have to port over their games to other consoles as well? Doesn't seem that huge of a market, judging from that fact alone.
You've cherry-picked the publisher/platform holder who is experiencing the most high profile failure of their platform in the industry today, and the conclusion you're trying to reach isn't "they need to go multiplatform because their 1st party platform has imploded (and with it their share of 3rd party royalities), and their software schedule has been a mess of production issues and poor products", but instead "they need to go multiplatform because uhh the PC market is a big illusion perpetuated by PC gamers because it can't single-handedly save Microsoft from their awful decisions".

Microsoft could have put Hellblade 2 on literally everything including Switch and PS4 and it would still have been a flop.

I also don't remember any "PC gamers" claiming their platform could carry all 1st party software on their back, regardless of quality or ineptitude of their publisher. What most people are observing is that the customer base for AAA, formerly console-centric games has fragmented since the PS2 and thus a PS2-era release strategy will not achieve good margins, especially as costs increase. That is borne out by simple facts, such as the success of various multiplatform Japanese console-centric studios who pivoted to a multiplatform strategy (FromSoft, Capcom, Sega) and failures of those who have not (Square-Enix).
 
Then thats incredible sad cause their profit margins are laughable and its mostly made up of 3rd party royalties.
Profit margins =/ profit
Toyota has small margins compared to Ferrari but Toyota makes 3000% more profit than Ferrari.

Source that is mostly from 3rd Parties?
 
Profit margins =/ profit
Toyota has small margins compared to Ferrari but Toyota makes 3000% more profit than Ferrari.

Source that is mostly from 3rd Parties?
Companies report profit cause "big numbers go BRRRRRR" but what really is important is Operating income. (Profit - operating expenses).
that is why PS makes about 8 times the Profits of Nintendo, but their Operating income is HALF of what Nintendo takes home.

Like say, Sony Sells 100$ worst of PS hardware and games, and Nintendo sells 20$
But it cost Sony 95$ (Materials, manufacturing, employees, etc) to sell those 100$ while it costs Nintendo 10$ to sell those 20$
then:
PS: 100$ - 95% = 5$ <- Operating Profit.
N: 20$ - 10$ = 10$ <-Operating Profit.

Those low margins (Revenues vs Operating Profit for PS is about 7% to 13%) is razon thin margins is why they started to diversify to PC. Not out of the goodness of their hearts.

regarding the "most comes from 3rd parties", quarterly reports from the last year has a breakdown of "Games" Profits.

Hardware: Revenue from games consoles (PS4 and PS5)
Physical Software: Revenue from 1st party games disc sold to retailers, and Revenue from 3rd party Royalties Discs sold to Retailers, and in Bundles
Digital Software: Revenue from both full 1st party and 3rd party games downloads via PS Store
Add-on Content: Revenue from Digital Content other than full games sold tru PS Store (such as DLC, MTX, etc etc etc)
Other Software: Sales from 1st Party games and add-on content on platforms others than PS Store (AKA, games sold on Steam)
Network and Services: The money from PS+ subscription
Other: Peripherals, such as PS.VR

You can see that Add-on Content is their biggest earner, then you take into account its mostly royalties (AKA no Operating Expenses), compared to Hardware or 1st party games.
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Considering PS1/PS2 had no digital/subscription revenue, PS3 had Sony losing money, and the PS5 came after the success of the PS4, I am not surprised at all to here PS5 is the most profitable console generation for Sony.
 
What I don't understand is if playstation is doing so well, why are they diluting their brand with putting their software on PC?
Cause they are not doing that well, sure they are black and still turning in cash but high profits is pointless if the amount of money require for it is almost equal, PS operating income margins are laughable small right now and this is supposed to be their heyday but they fell on the same trap as the rest of the industry, uncontrollable ballooning dev costs and timelines.

Nintendo is there as a point of reference.
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Cause they are not doing that well, sure they are black and still turning in cash but high profits is pointless if the amount of money require for it is almost equal, PS operating income margins are laughable small right now and this is supposed to be their heyday but they fell on the same trap as the rest of the industry, uncontrollable ballooning dev costs and timelines.

Nintendo is there as a point of reference.
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It's been discussed many times.
Nintendo reports Net Sales (Sales minus returns, allowances, discounts), while Sony reports Sales (Total Units Sold*Sale Price Per Unit).
Nintendo take into acсount only commision from third party titles sales while Sony take into account 100% from third-party titles sales.
Sony's Sales and Nintendo's Net Sales incomparable on so many levels, nor are the margins based on those metrics.
It makes no sense to compare Sony's Sales Margin [(Operating Profit/Sales)*100] with Nintendo's Operating Profit Margin [(Operating Prtofit/Net Sales)*100].
Sony's Operating Profit Margin is currently smaller than Nintendo's, but not 5x smaller.
 
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It's been discussed many times.
Nintendo reports Net Sales (Sales minus returns, allowances, discounts), while Sony reports Sales.
Nintendo take into acсount only commision from third party titles sales while Sony take into account 100% from third-party titles sales.
Sony's Sales and Nintendo's Net Sales incomparable on so many levels, nor are the margins based on those metrics.
It makes no sense to compare Sony's Sales Margin [(Operating Profit/Sales)*100] with Nintendo's Operating Profit Margin [(Operating Prtofit/Net Sales)*100].
Sony's operating margin is smaller than Nintendo's, but not 5x smaller.
There number are there, we have raw sales, we have operating income, its easy to calculate the Raw vs Operating income % and it gives you that.

Ignoring non accountable/ non operational stuff (Tax, Depreciation, etc) we get those margins, at which Sony Margins are laughable small and basically they live and die from 3rd party royalties.
This is why they started to diversify to PC, cause they need to scrap for every profit they can (even if it means giving a 30% share to Steam)
This is why they fought tooth and Nail regarding the Microsoft/ Blizzard merge, cause CoD is one of those 3rd Party cash cow keeping them alive.

>Nintendo take into acсount only commission from third party titles sales while Sony take into account 100% from third-party titles sales.
If Sony takes into account 100% of a 3rd party tittle, then somewhere they have to account giving it back to the 3rd party cause they dont OWN 100% of the sale, just their Royalty cut. and after that is done we are left with the operating income.
That or Sony is doing a terrible job at book keeping which I doubt a multinational conglomerate does.
 
The most interesting part of this to me is that it confirms the PS3 lost 4 billion USD.
PS3 almost became the undoing PS
>Loses 90% of the money PS1 and PS2
>In the middle of Sony pulling its biggest re-structuring to date, branches being chopped, or merged, selling assets etc)
Their saving graces were that KAZ had a soft spot for the branch so it survived the Purge, and that its main competitors shat the bed massively on the next get (PS4, XB1 and WiiU), which basically allowed PS to run a solo race that gen and recover.

Personally speaking is Switch had been the follow up to Wii, Switch, Switch vs PS4 could have easily kill the branch.
 
If Sony takes into account 100% of a 3rd party tittle, then somewhere they have to account giving it back to the 3rd party cause they dont OWN 100% of the sale, just their Royalty cut. and after that is done we are left with the operating income.
That or Sony is doing a terrible job at book keeping which I doubt a multinational conglomerate does.
Yes, in Net Sales, in Operating Profit, etc. But Sony hasn't publicly disclosed Net Sales or Net Profit. We can't calculate the Operating Margin for G&NS.
31.64% is Nintendo's Operating Profit Margin. 6.8% is not a Sony's Operating Profit Margin. Those metrics are incomparable.
Sony's G&NS is less efficient and less profitable than Nintendo. But this wild difference in margins is the result of comparing incomparable metrics.
https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/23q4_supplement.pdf
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Cause they are not doing that well, sure they are black and still turning in cash but high profits is pointless if the amount of money require for it is almost equal, PS operating income margins are laughable small right now and this is supposed to be their heyday but they fell on the same trap as the rest of the industry, uncontrollable ballooning dev costs and timelines.

Nintendo is there as a point of reference.
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But those numbers are not comparable. Sonys numbers are with the whole 3rd party sale price on psn.
 
Yes, in Net Sales, in Operating Profit, etc. But Sony hasn't publicly disclosed Net Sales or Net Profit. We can't calculate the Operating Margin for G&NS.
31.64% is Nintendo's Operating Profit Margin. 6.8% is not a Sony's Operating Profit Margin. Those metrics are incomparable.
Sony's G&NS is less efficient and less profitable than Nintendo. But this wild difference in margins is the result of comparing incomparable metrics.
https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/23q4_supplement.pdf
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But those numbers are not comparable. Sonys numbers are with the whole 3rd party sale price on psn.
So, Assuming you are right and Sony's "Sale" is not "Net Sales" then
1) What would it be? Gross profit? it cant bet any aleatory metric.
2) Even then, it should not tip the scale that much cause 3rd party game sales still fall under games sales and portion of the pie is LOWER than MTX's.
 
Cause they are not doing that well, sure they are black and still turning in cash but high profits is pointless if the amount of money require for it is almost equal
That would be revenue, not profit.
 
So, Assuming you are right and Sony's "Sale" is not "Net Sales" then
1) What would it be? Gross profit? it cant bet any aleatory metric.
2) Even then, it should not tip the scale that much cause 3rd party game sales still fall under games sales and portion of the pie is LOWER than MTX's.

I don't know, but you cannot compare the revenue numbers for sony and Nintendo because they calculate revenue in different ways.
 
Yes, in Net Sales, in Operating Profit, etc. But Sony hasn't publicly disclosed Net Sales or Net Profit. We can't calculate the Operating Margin for G&NS.
31.64% is Nintendo's Operating Profit Margin. 6.8% is not a Sony's Operating Profit Margin. Those metrics are incomparable.
Sony's G&NS is less efficient and less profitable than Nintendo. But this wild difference in margins is the result of comparing incomparable metrics.
https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/23q4_supplement.pdf
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Operating income is calculated after the 3rd-party cut has been repaid (they bucket that under an expense related to sales). So the final OI numbers at least will be directly comparable between them, because that number at least arrives at the same place using 2 different calculation methods.

Sony does it this way (which, like Microsoft, is not the standard for reporting revenue on digital sales, Nintendo is more in line with other companies with online software distribution storefronts like Apple and Valve regarding how it's reported) because it makes the revenue line look impressive. But part of the reason you make the revenue line look impressive is that it sends a signal to (albeit less savvy) investors that the OI will eventually go up as costs are reduced. The problem is that OI has been relatively stagnant over several years as the revenue number climbed immensely, because the 70% repaid to 3rd-parties is a relatively static expense per software unit or MTX sold and all their other expenses within their control have either not gone down or increased.

Even if one were to cut their revenue figures in half to account for them booking 3rd-party digital sales cuts as revenue (and I use half because of the money SIE doesn't have to split with anyone on its 1st-party software, etc), it's still quite a low operating income margin by the standards of this industry (though definitely more in line with the large Western publishers than literally anyone else, because they've also had a rough go of revenue conversion/OI margin of late), so that alone doesn't make the numbers good or palatable.

Really, if they were having a great go of it, Sony Group wouldn't have said things to the contrary of that or been as hands-on picking someone new to replace Jim Ryan (who will likely be far more micromanaged by Sony Group than any of their predecessors).
 
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Operating income is calculated after the 3rd-party cut has been repaid (they bucket that under an expense related to sales). So the final OI numbers at least will be directly comparable between them, because that number at least arrives at the same place using 2 different calculation methods.
Both companies use IFRS for their financial statements. So, yes, they calculate OI and every other identical metrics by the same standards.
I'm talking about margins. We can't calculate Operating Profit Margin for Sony's G&NS. And it's pointless to compare Sales with Net Sales, as well as the margins based on those metrics.
We can directly compare OI. And we know that's Sony's G&NS is less profitable than Nintendo. We know that Sony's G&NS has a constant problems with Profits. But that's about it. We don't know how exactly Sony G&NS business is efficient in comparison to Nintendo, thou it's definetly less efficient.
So, Assuming you are right and Sony's "Sale" is not "Net Sales" then
1) What would it be? Gross profit? it cant bet any aleatory metric.
2) Even then, it should not tip the scale that much cause 3rd party game sales still fall under games sales and portion of the pie is LOWER than MTX's.
It's literally Sales: Total Units Sold*Sale Price Per Unit. It's not a Gross Profit or any other type of Profit. Sony doesn't publicly report Gross Profit or Net Profit at all.
And yes, Sony's G&NS MTX share of sales is usually larger than Games. But again, they take into account 100% from third-party MTX sales.
 
Not sure where else to ask, but:

Could someone provide a list with the biggest games scheduled to release in 2024 for PS5? "Big" as in both "high sales" or "highly wanted by fans". Trying to gauge what PS5 has in store sw-wise for the rest of the year. Thx.
 
Not sure where else to ask, but:

Could someone provide a list with the biggest games scheduled to release in 2024 for PS5? "Big" as in both "high sales" or "highly wanted by fans". Trying to gauge what PS5 has in store sw-wise for the rest of the year. Thx.

First party wise, there’s no major sellers. This is what sony is publishing

  • Concord
  • Astro Bot
  • Until Dawn Remake
  • Horizon Lego Adventure
Some could be surprise hits, but there’s no God of War/Spider-Man level IP like they stated. 3rd parties like Dragon Age, Star Wars and Assassins Creed,etc. will carry it. 2H for SIE is about demo expansion
 
I don't know, but you cannot compare the revenue numbers for sony and Nintendo because they calculate revenue in different ways.
they are public trade companies, thats why we have numbers, cause they are forced to share that information, meaning they have to get to some standards, not just calculate stuff whoever they want so Sony's "those are totally not net sales" have to have an equivalent to what Nintendo reports or have to have BIG disclaimers in every report.

And yes, Sony's G&NS MTX share of sales is usually larger than Games. But again, they take into account 100% from third-party MTX sales.
Ok if it makes you feel better, then
"Nintendo and Sony OI% cant be compared, but from the publicly available information, from Sales reported by Sony on GN&S against their Operating income, they margins are laughable low and thats why they are forced to diversify to PC"
 
they are public trade companies, thats why we have numbers, cause they are forced to share that information, meaning they have to get to some standards, not just calculate stuff whoever they want so Sony's "those are totally not net sales" have to have an equivalent to what Nintendo reports or have to have BIG disclaimers in every report.


Ok if it makes you feel better, then
"Nintendo and Sony OI% cant be compared, but from the publicly available information, from Sales reported by Sony on GN&S against their Operating income, they margins are laughable low and thats why they are forced to diversify to PC"

It is very clear from both Nintendo and Sony how thet calculate their revenue. Thats why we know that the numbers are not 100% comparable.
 
Both companies use IFRS for their financial statements. So, yes, they calculate OI and every other identical metrics by the same standards.
I'm talking about margins. We can't calculate Operating Profit Margin for Sony's G&NS. And it's pointless to compare Sales with Net Sales, as well as the margins based on those metrics.
We can directly compare OI. And we know that's Sony's G&NS is less profitable than Nintendo. We know that Sony's G&NS has a constant problems with Profits. But that's about it. We don't know how exactly Sony G&NS business is efficient in comparison to Nintendo, thou it's definetly less efficient.

It's literally Sales: Total Units Sold*Sale Price Per Unit. It's not a Gross Profit or any other type of Profit. Sony doesn't publicly report Gross Profit or Net Profit at all.
And yes, Sony's G&NS MTX share of sales is usually larger than Games. But again, they take into account 100% from third-party MTX sales.
I mean, you clipped around the rest of my post that included a way to reasonably estimate their OI margin in a comparable way to tell me I didn’t understand what you were discussing. There is a way to make them at least more comparable and it doesn’t look all that much better when you do that as you were seemingly suggesting it would.
 
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I mean, you clipped around the rest of my post that included a way to reasonably estimate their OI margin in a comparable way to tell me I didn’t understand what you were discussing. There is a way to make them at least more comparable and it doesn’t look all that much better when you do that as you were seemingly suggesting it would.
A significant portion of sales is hardware. In FY23, hardware accounts for 28.38% of sales in the G&NS segment.
PS5 is a more expensive console than Switch, so it generates more revenue. Hovewer the profit it generates is low due to high cost of production.
There is indeed a way to somehow compare Sony's Sales with Nintendo's Net Sales. We can exclude hardware from both companies numbers and than cut Sony's G&NS numbers in half.

Sony:
(4267734-1211451-83086)/2= 1486598
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Nintendo:
1567800*0.564=884239
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I'm not arguing that Sony's G&NS segment is less profitable and less efficient than Nintendo. My point is that their margins are not 5x different.
In the comparison above, I didn't take into account that almost all of Sony's G&NS MTX sales are third-party sales. And even with these estimates and possible errors, we see that Sony's GN&S is less efficient, but not 5x less efficient, if we are talking about software.
 
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