Apparently in a business call with shareholders, the CFO was outright asked about Sony going with a GamePass model and the CFO said that a deterioration of quality would happen due to less funds.
Whether that was a shot at GP or not (I don't think it was) is besides the point. Because I think the point Sony's CFO was trying to convey there is that, when it comes to entertainment in particular, there is a LOT of market volatility, even more so when services are involved, because the end customer can just up and drop their subscription if the content they want isn't there. We're seeing that happen already with services like Netflix; the reason why it'd be problematic for a company like Sony to adopt that type of GP model is because with that amount of volatility, you could never count on a specific number of sustained subscribers over the long-term, which probably would make budget planning very difficult.
At this point you can't even realistically account or speculate on what audience size you would have in translation of customers into the subscription service or how big that market could get, because we don't even know what size the market for GP-style subscription services in gaming actually is. However, it's likely they're taking into what appears to be the size limit of film/tv streaming services like Netflix and maybe they're seeing that if the market there has a finite cap that might be nearing full saturation, if even that number may not be enough (based on internal calculations) to sustain budgets for the type and number of AAA Sony produce as well as cover operating costs of producing hardware & maintaining employee counts, benefits, bonuses etc., then they may have a point.
It's not like Microsoft, who also have subscription services in non-entertainment markets like business, enterprise, medical & military, and therefore have Azure, Office etc. in industries with
very low volatility & very
high subscription retention rates (since the customers are literal businesses, they're not going to suddenly "cancel" for a month here or there or they risk tanking their business altogether. They also probably go for long-term contracts to get some type of discount pricing, if possible). So there being high volatility in subscription rates/stability or revenue flow per user in the gaming market when it comes to subscriptions, wouldn't impact Microsoft's bottom line nearly as much as would Sony's.
Try keeping that in mind next time someone tries saying Sony should put all 1P games Day 1 into a service.
Like the RAM, which it has less of? Maybe the SSD which is also smaller? It has less everything than the Series X.
Memory. 10GB GDDR6 128 bit-wide bus
Memory Bandwidth. 8GB @ 224 GB/s, 2GB @ 56 GB/s.
Internal Storage. 512GB Custom NVME SSD
VS
Memory. 16GB GDDR6 w/320 bit-wide bus
Memory Bandwidth. 10 GB @ 560 GB/s, 6 GB @ 336 GB/s.
Internal Storage. 1TB Custom NVME SSD
Series S is easier to produce no matter how you look at it.
Series S also has a smaller (and simpler) PCB/motherboard, probably less I/O ports (maybe one less USB port at very least), much simpler cooling solution (smaller heatpipe, smaller & lower RPM fan, smaller PSU requiring less power), and smaller overall physical footprint meaning smaller size meaning less material for shell casing.
I wouldn't go as far to say they're making a profit or Series S or even breaking even, but they're probably in a spot where maybe just one game purchase or a couple months' worth of GP would be either break even or a very small profit.