Sony is selling PS5 at a loss, investors say

Sony shipped more than 4.5 million PlayStation 5s from the console’s launch on November 12 through the end of the year, but suffered a loss on those sales as the PS5’s “strategic price” is. less than what it cost to make it.

The disclosure was part of Sony’s quarterly investor report, delivered to Japan earlier today. Losses on PS5 sales were not specifically broken down – and they were part of an overall gaming and network services segment that saw an increase of 26.7 billion yen ($ 2.5 billion ) operating profit compared to the same quarter in 2019.

Sony’s PlayStation revenue from game sales (PS4 and PS5, additional content included) as well as larger profit margins on the outgoing PlayStation 4 more than made up for any shortfall, the company said.

By comparison, the PlayStation 4 sold over 4.2 million units between its launch in November 2013 and the end of this year. In November, the company said the new PlayStation 5 faced “unprecedented” demand, which made its availability scarce, even though more PS5s were available, in whole numbers, than their predecessor. Microsoft’s Xbox Series X faced the same problem, with the company’s CFO telling investors in November that a console shortage could last until April.

Bloomberg reported as early as February 2020 that the scarcity of components had taken the cost of manufacturing the PlayStation 5 to $ 450. Analyst Michael Pachter, in an October interview, speculated that Sony would break even on the PlayStation 5 at $ 499, but lose money on the $ 399 digital edition that doesn’t have not an optical disc drive.

Elsewhere in Sony’s financial report, the company upped its sales and operating profit guidance for the PlayStation division in the year ending March. Sony now expects an additional 30 billion yen ($ 285 million) in sales from its Game & Network Services segment, and additional operating profit of 40 billion yen ($ 380 million) for the year .

Sony also reported a PlayStation Plus subscriber base of 47.4 million users, with 114 million monthly active users of the service at the end of the year.