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Business Sales-Age Sony Q1: 2.3 M PS5s shipped; G&NS reports record-breaking revenues

Bryank75

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I don't want to give Bryank75 Bryank75 a heart attack, but PC sales are in the "Others" category and that category grew by 90% and is twice as big as the physical software category (which gets hotly disputed weekly threads on here). Sorry Bryan!

So what? That is a hodge podge of things and Physical sales are massively down due to covid.

The point of exclusives are to drive hardware sales....not to actually make profits on their own. So your approach to this is flawed from the beginning.

It's like me saying...look at the hardware +116.9%, why do they need PC at all when their hardware is so popular!?

Also the increase in 'others' does not make up for the fall of nearly 20% in digital software and add ons......... they could have bought a real studio that makes and sells great games like MiHoYo and made massive gains instead of investing in a PC porting studio.
 
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Elios83

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Totoki-san explained that Sony has not changed this fiscal year’s target of shipping more than 14.8 million PS5 units which is the number of PS4 units shipped in the fiscal year after its release.
Sony believes that the gaming market has expanded significantly over the last two years. Total gameplay time for PlayStation users in the first quarter of the fiscal year (between April and June 2021) decreased 32% year-on-year, but it was 18% higher compared to 2019, which Sony sees as a “steady growth” overall.
Sales of first-party software decreased year-on-year during the quarter due to the comparison with The Last of Us Part II. That being said, sales of all games launched by Sony between April and June including Ratchet & Clank: Rift Apart and MLB The Show 21 exceeded the company’s expectations.


In particular, MLB The Show 21 contributed “significantly” to sales and profits during the quarter thanks in part to strong DLC sales.
Totoki-san mentioned the fact that MLB The Show 21 was sold on platforms other than PlayStation, following the “Initial success” seen by Horizon Zero Dawn and Days Gone on PC.


He also added that PlayStation Studios is accelerating investments to strengthen its production capabilities, mentioning the acquisition of Housemarque as an example and that seven of Sony’s thirteen studios have been acquired.
Totoki-san also mentioned the acquisition of Nixxes, which has “excellent technology for porting game software between different platforms such as PC.” Sony expects that “Nixxes will offer technological support to all of its studios in a horizontal manner.”
 
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arvfab

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I don't want to give Bryank75 Bryank75 a heart attack, but PC sales are in the "Others" category and that category grew by 90% and is twice as big as the physical software category (which gets hotly disputed weekly threads on here). Sorry Bryan!

I think the increase in "Others" is mainly due to the MLB copies and DLCs they are selling on Xbox as they surely are not part of the PSN digital sales.

But Days Gone released on PC, so makes sense that it contributed to it, too.
 

kyliethicc

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I think the increase in "Others" is mainly due to the MLB copies and DLCs they are selling on Xbox as they surely are not part of the PSN digital sales.

But Days Gone released on PC, so makes sense that it contributed to it, too.
"Others" is just for peripherals. Like extra controllers, Pulse headsets, PSVR, chargers, etc.

"Hardware" = just consoles
"Others" = peripherals (aka all other hardware except consoles)

"Add on" = DLC. And PC ports are part of digital software. . edit - Looks like they add PC ports into Other now.
 
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Bernd Lauert

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I think the increase in "Others" is mainly due to the MLB copies and DLCs they are selling on Xbox as they surely are not part of the PSN digital sales.

But Days Gone released on PC, so makes sense that it contributed to it, too.
You're right, I forgot about MLB on Xbox.
 

Bernd Lauert

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"Others" is just for peripherals. Like extra controllers, Pulse headsets, PSVR, chargers, etc.

"Hardware" = just consoles
"Others" = peripherals (aka all other hardware except consoles)

"Add on" = DLC. And PC ports are part of digital software.
It says (PSN) after digital software, so I assume digital software is only PSN.
 

arvfab

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"Others" is just for peripherals. Like extra controllers, Pulse headsets, PSVR, chargers, etc.

"Hardware" = just consoles
"Others" = peripherals (aka all other hardware except consoles)

"Add on" = DLC. And PC ports are part of digital software.

I was going by the image above, thought it was official so I thought there was a reason why they had (PSN) after digital, but now I've seen the "copyright" on the pic, so you are probably right.
 

Heisenberg007

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Console is hard to grow? Do you see how they are selling?
The console market is hard to grow.

It has always been 200-250 million users in the gaming console industry. That's the saturation point of the market. Now games are expanding in scope and budget, but the industry isn't growing at the same pace. That leaves these companies with two options:
  1. Scale back everything. Make shorter, fewer AAAs that don't cost as much. Like Shawn Layden was suggesting.
  2. Grow the market beyond this 250 million user base. What Jim Ryan and Phil Spencer are trying to do.
I personally like the second option more. Expansion of popular IPs on mobile devices, new platforms like PCs, Cloud streaming, movie and TV shows based on gaming IPs (such as Uncharted and TLOU).

Imagine if the industry grows to 1 billion gamers, instead of the current 250M audience cap. There is a potential that PlayStation may sell 200 million units in the future, and not just hover b/w 100-125 million console units.
 
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Their first party revenue stat is certainly not breaking numbers. 10.5 this quarter vs 19.7 last quarter. That's almost 50% down. Why would they make less money from their first party games? Didn't they actually increase the price of their games? Math don't check out. Do they?
 

assurdum

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Sales remain unchanged from the April forecast due to higher-than-expected sales in the Electronics Products & Solutions (“EP&S”) and Music segments, substantially offset by lower-than-expected sales in the Imaging & Sensing Solutions and Pictures segments.

Operating income is expected to be higher than the April forecast due to expected increases in operating income in the Music, EP&S and Pictures segments, as well as an expected decrease in operating loss in All Other, Corporate and elimination.

Income before income taxes is expected to be 955 billion yen, which is higher than the April forecast. This expected increase is primarily due to the above-mentioned expected increase in operating income.

Net income attributable to Sony Group Corporation’s stockholders is expected to be higher than the April forecast mainly due to the above-mentioned expected increase in income before income taxes

🙏🤞hoping for a 10% upside to the stock prices
Negativism & downplay mode activeted only for sony. You should work for windows central.
 
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prinz_valium

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Unless you think PSVR grew by 90% for literally no reason, most of the growth will be from PC. Makes sense since Days Gone got released in May. I'm gonna ignore the childish insult xP
Well it's also controllers.
But peripherals in Q1 2020 were extremely high, so 90% growth just with the black and pink PS5 controller is questionable.

But guessing is not as good as knowing
 
Nov 17, 2020
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The console market is hard to grow.

It has always been 200-250 million users in the gaming console industry. That's the saturation point of the market. Now games are expanding in scope and budget, but the industry isn't growing at the same pace. That leaves these companies with two options:
  1. Scale back everything. Make shorter, fewer AAAs that don't cost as much. Like Shawn Layden was suggesting.
  2. Grow the market beyond this 250 million user base. What Jim Ryan and Phil Spencer are trying to do.
I personally like the second option more. Expansion of popular IPs on mobile devices, new platforms like PCs, Cloud streaming, movie and TV shows based on gaming IPs (such as Uncharted and TLOU).

Imagine if the industry grows to 1 billion gamers, instead of the current 250M audience cap. There is a potential that PlayStation may sell 200 million units in the future, and not just hover b/w 100-125 million console units.
What is the reason that the console market doesn't grow?
 

kyliethicc

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I was going by the image above, thought it was official so I thought there was a reason why they had (PSN) after digital, but now I've seen the "copyright" on the pic, so you are probably right.

This?



Hardware = PS4 & PS5 consoles
Game Software = Games, DLC, Micro-transactions
- Physical Software = Games, disc
- Digital Software = Games, digital
- Add Ons = DLC & Micro-transactions
Network Services = PS Plus & PS Now subs
Others = PSVR, controllers, peripherals
 

arvfab

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This?



Hardware = PS4 & PS5 consoles
Game Software = Games, DLC, Micro-transactions
- Physical Software = Games, disc
- Digital Software = Games, digital
- Add Ons = DLC & Micro-transactions
Network Services = PS Plus & PS Now subs
Others = PSVR, controllers, peripherals

No, the one with the pie chart.
 

lh032

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Well it's also controllers.
But peripherals in Q1 2020 were extremely high, so 90% growth just with the black and pink PS5 controller is questionable.

But guessing is not as good as knowing
the more dualsense drift, the higher profit xP
 

prinz_valium

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Oh, well here's the breakdown.

Looks like "Other" segment does now include 1st party sales on PC/Xbox. First time they've done that.

Yeah. Just wanted to post that.
But for Xbox, that revenue is just royalties at best, because MLB is the publisher of the game. Not Sony.
 

bitbydeath

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So it makes sense that most of the increased revenue in "Others" is from MLB on Xbox + Days Gone on PC (+ the new DualSense colors)
MLB was included on GamePass so it was probably the millions they got from that which gave it a push.
 

yurinka

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He didnt have anything to do with the console or the game development....
his ideas are cloud is great, PC, mobile.......this unfocused hodgepodge strategy that goes nowhere.
Topped off with zero communication and arrogance.
If he didn't have anything to do with what I mentioned, then he has even less to do with cloud, PC and mobile since Sony already was doing all that years before Jim got his current position.

The 'Zero communication and arrogance' are just embarassing lies, there are many interviews to both him and Hermen, PS blog posts and State of Play events, plus their youtube channels and social media accounts breaking gaming history records for gaming company accounts that prove that what you say is bullshit. You're just a hater.
 
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yurinka

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My question was why are they porting to PC when they have a cloud service for non-console users????

No need for PC ports.Either buy the console or play on PSNow....simple, concise, no need for more bullshit, no need for nixxes or more studio time to accommodate.
There are 4 main reasons:
  • Top AAA budgets grow way faster than consoles units sold or AAA sales, and the average price of games sold today is smaller than it was decades ago, which means they must expand their markets and find new revenue sources, and to port old games to PC is way better than to turn their games into a casino-like MTX fest
  • Almost no PC player uses game streaming but instead they buy games
  • To sell games -or ports- is more profitable than to include them in current subscriptions
  • PC is huge in many big countries that for several reasons consoles aren't big there like Asia (China, Russia, etc), Latin America, etc
And well, they bought a studio with a long tradition of PC ports that will handle these ports so the other gamedevs don't need to worry about it. To port old games to PC allows them to get more money that helps them to continue making big ass AAA games that don't have tons of DLC and MTX in a non took risky way.

They shoulda bought a real studio that can make a game and put time into managing a new project than porting to make pennies.
They also bought Housemarque recently, are rumored to be buying Bluepoint and Arc System Works, and signed 2nd party deals with 3 new studios from the key people behind Destiny, Call of Duty Black Ops and Assassin's Creed.
 
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ChuckeRearmed

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ChuckeRearmed

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-16% is a massive decrease in content and services and Jim has been pushing PSNow VERY hard, advertising is everywhere online.
Now that I think about, indeed probably that decrease in sales was less for Xbox because they have the revenue from PC. Also they have more service games like ESO, Fallout76 and Sea of Thieves.

But also probably because last year TLOU2 was released. So probably that is the true reason of decrease.
 

Mr Moose

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Their first party revenue stat is certainly not breaking numbers. 10.5 this quarter vs 19.7 last quarter. That's almost 50% down. Why would they make less money from their first party games? Didn't they actually increase the price of their games? Math don't check out. Do they?
Ghost of Tsushima and The Last of Us II.
 

yurinka

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Their first party revenue stat is certainly not breaking numbers. 10.5 this quarter vs 19.7 last quarter. That's almost 50% down. Why would they make less money from their first party games? Didn't they actually increase the price of their games? Math don't check out. Do they?
Because the first party games they released this quarter (Ratchet and Returnal) were next gen only, and their next gen console had less than 10M consoles sold. So until over time the console sells a lot of units more they won't be able to sell a lot of units of next gen only games.

The previous generation has like 8 times more the amount of active users buying games as of today and a total install base 12x bigger, this is why they make crossgen games. To leave behind the players who still couldn't upgrade isn't very smart.

In any case, Sony said that all their games released this quarter -like Returnal or Ratchet- exceeded their expectations. So they are happy.
 
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reksveks

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I thought it was until July 18th? What's the end of their Q1 date? :messenger_weary:
You might be right.

The data and terminology hereinafter are presented in accordance with International Financial Reporting Standards (“IFRS”) because Sony has adopted IFRS
starting in the first quarter of the fiscal year ending March 31, 2022. For further detail on terminology, please refer to the Notes to Condensed Consolidated Financial
Statements on page F-15 in Sony’s Quarterly Financial Statements for the first quarter ended June 30, 2021. A footnote is added where non-IFRS data is presented.

I don't know alot about accounting but looks like its June 30th, right?
 
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ChuckeRearmed

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That's almost 50% down. Why would they make less money from their first party games? Didn't they actually increase the price of their games?
Well, you had TLOU2 last year while this year you had R&C and Returnal. Even with the increased price the numbers are not comparable I believe.
 

reksveks

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I am sure that we saw quotes about how a decent chunk of the ps5 buyers were new to the Playstation platform so not sure what's going on. Those users not buying ps+ or is there increased churn in the existing ps4 userbase whom can't get a ps5.
 

megreotsugua

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I am always fascinated by how aside Nintendo, the margins in console market are so small. It is literally around 10%.

Because for Sony and Microsoft (and for Steam as well), the majority of the sales revenue come from the 30% cut in the the 3rd party game sales. So the entire amount paid through the PSN will reflect in the revenue but most of that money is an obligation on the part of Sony to pay the corresponding 3rd party publishers.

Nintendo's revenue comes mostly from the sales of their first party games. They keep all the money.

Factor in the equation, the server maintenance and all other expenses, that revenue garnered through the 30% cut will further reduce.
 

Bulletbrain

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So why is GN&S operating income down 40% YoY. That's quite a drop considering top-line growth.

Edit: adjusted for FX, revenues were actually down YoY, and the operating profit decline is even steeper. Both had a positive FX impact.

Game software sales is well down YoY. I guess that kind of explains the operating profit loss. Interesting.
 
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reksveks

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So why is GN&S operating income down 40% YoY. That's quite a drop considering top-line growth.

Edit: adjusted for FX, revenues were actually down YoY, and the operating profit decline is even steeper. Both had a positive FX impact.

Game software sales is well down YoY. I guess that kind of explains the operating profit loss. Interesting.
Also remember they probably were making profit of 1.8m ps4's and now they are making profit from 0.5m ps4 and losses from 1.8m ps5
 
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kingfey

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In business it's called playing 'hardball'...... it doesn't mean that MLB will walk away with the license, it just means you are unwilling to give in easily.

It certainly wouldn't have been on Gamepass.

Zero point to the PC ports.... wasted energy, another pointless function that makes no real material difference. There is basically no profit to be had from it and it lowers the value of the exclusives.

@onesvenus if they want to sell in 'uncharted areas' they just need to have good regional pricing or payment plans for the consoles when necessary. PSNow is the other option...... people can use that if they can't afford hardware, why are they cannibalizing PSnow subs by putting games on PC???

The strategy is completely unfocused....
The worst thing mlb did, was give the license to Playstation. EA would have made the game big.

As bad as people claim their sports to be, they get tons of copies sold. While mlb is struggling to do 1m. This year, it just did 2m. Madden nfl 2017 on other hand did 1.06m is its first week. With EA, that franchise would have huge success. Even if we hate them.
 
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