PlayStation sales begin to slow, but Sony still rules the year in revenue

Despite a drop in sales of PlayStation 4 hardware, Sony can be happy with the latest results from its Games and Network services arm as part of the overall company’s Q3 financials for the quarter ending December 31, 2018, released today.

Revenue was up at ¥790.6 billion ($7.2 billion), which resulted in a 10 percent increase YoY for the division, with operating income at ¥73.1 billion ($668.2 million), down YoY by around 14 percent. Sony still expects the games and network services division to bring in revenue of ¥310 billion ($2.8 billion) and operating income of ¥2.35 trillion ($21.5 billion) by the time the financial year wraps up on March 31, 2019.

Hardware shipment numbers of PlayStation 4 slowed down for the quarter despite the Holiday period, with 8.1 million units shipped over the Holiday period, down 0.9 million from the same period last year. This brings total shipment numbers LtD for the PS4 to 94.2 million units (Sony announced at CES last month that 91.6 million PS4 units were sold to consumers).

Sony declined to change its forecast for the year, though, saying it still sees PS4 hardware shipments reaching 17.5 million units by the end of the financial year ending March 31. To date, 15.2 million PS4s have been shipped over FY 2019, meaning only 2.3 million units have to be shipped in Q4 for it to achieve its total. Sony should reasonably reach that figure with comfort.

Despite this, the recent numbers confirm that PlayStation 4 was the best selling console worldwide in 2018, shipping 17.7 million units, 0.3 million more than the 17.4 million units of Nintendo Switches shipped in the same period.

But even with the hardware slowdown, sales of software helped offset the hardware decrease. 87.2 million PS4 software units were shipped during Q3, with 37.2 percent of sales being accounted for by digital sales. No doubt the success of Sony Santa Monica’s God of War and Insomniac Games’ Spider-Man among other titles helping to drive sales.

Sony announced that PlayStation Plus subs were at 36.3 million members, an increase of 2 million members over the last quarter and up 15 percent YoY. PlayStation Network brought in revenue as much as ¥434 billion ($3.9 billion) in the quarter, a 45 percent YoY increase.

But here’s the kicker: as pointed out by Niko Partners’ analyst Daniel Ahmad, the revenue brought in by PlayStation Network over 2018 was more than what Microsoft’s gaming arm and Nintendo brought in in revenue in the same period. With such figures, Sony Corp president and CEO Kenchiro Yoshida’s recent comments to the New York Times about bringing together PSN and Sony’s entertainment arms start to make more sense.

For 2019, it remains to be seen what will drive PlayStation 4 sales. Dates for marquee first-party games like Naughty Dog’s The Last of Us: Part II, Kojima Productions’ Death Stranding and Sucker Punch’s Ghost of Tsushima – games are that expected to significantly drive hardware and software sales plus revenue – are yet to be given.

And there’s the almighty elephant in the room of PlayStation 5, which looks more likely with each passing week to get a reveal sometime this year for a 2020 launch (Ahmad mentioned in a Resetera thread last week first-party studio focus has now turned to PS5).

It does feel PlayStation 4 will not only hit its FY target of 17.5 million units shipped, but will also easily hit 100 million units shipped and sold to the consumer respectively at some point this year.

If nothing else, it feels like this will be a year to behold for PlayStation.