PlayStation Has Swiftly Solved Its Profitability Problem | Push Square

pushsquare.com:

You may remember over the past year there’s been a lot of handwringing over PlayStation’s profitability. As is so often the case, this all got bundled up with Xbox’s issues, and numerous thinkpieces were written about the console market as a whole.

Well, Sony’s largely already solved the issue. In its latest earnings report – where it confirmed PS5 has shipped 65.5 million units – it revealed an astronomical increase in operating profit, up 184 per cent year-over-year.

For the three month period ending 30th September, PlayStation posted profits of ¥138.8 billion (~$909 million), an enormous increase on the razor-thin ¥48.9 billion (~$320 million) it accumulated the year prior. This is also more than double the ¥65.2 billion (~$427 million) it achieved in the previous quarter.

It’s prompted the platform holder to increase its profitability forecast for the current fiscal year, up from ¥320 billion (~$2 billion) to ¥355 billion (~$2.3 billion).

77.7 million PS5 games sold

37% considered «new users»

The manufacturer cited increased hardware profitability and improved third-party game sales as the reason for the change. It specifically pointed to Soulslike sensation Black Myth: Wukong as one game that significantly lifted its profitability this quarter.

Of course, it’s worth noting that the increased hardware profitability has resulted in price increases in some countries, such as Europe and Japan. We also suspect the PS5 Pro is being sold at a very large profit.

There’s also been a bunch of layoffs and studio closures. Obviously it won’t factor into these results, but Firewalk Studios and Neon Koi were recently shuttered.

So it’s not all good news, but PlayStation did need to become more profitable. While it’s always managed to amass absurdly high revenues, its margins had been razor-thin recently. It’s now streamlined the business in a way that gives it more breathing room, which is a net positive for the health of the company.

As the Editor of Push Square, Sammy has