Sony cut its full-year profit outlook, warning of weak PlayStation game sales. The forecast comes as Sony revealed that it shipped 2.4 million PlayStation 5 consoles in its most recent quarter, up just 4% from the 2.3 million shipped during the same period last year. PS5 lifetime shipments have now reached 21.7 million.
While hardware sales are up slightly year over year, software sales are down 26%. On an investor call, Sony blamed gaming’s slump on a lack of big PlayStation titles this year compared to 2021 and less time spent playing games in general – backed by monthly active PlayStation Network users. down 3% to 102 million. Sony released their exclusive Gran Turismo 7 and Forbidden Horizon West titles earlier this year, but Ring of Elden arrived on multiple platforms at the same time and stole the show.
Reuters reports that Sony has now revised its full-year earnings forecast down 16% for its games business as it expects further declines in game sales in the next quarter, alongside costs associated with its recent acquisition of Bungie for 3, $7 billion.
Sales of Sony’s PlayStation games are the latest sign that the gaming industry is slowing after a surge during the early stages of the pandemic. Microsoft doesn’t reveal its own Xbox hardware shipments, but the company saw Xbox hardware revenue drop 11% in its most recent quarter, alongside a 6% drop in Xbox content and services revenue and a 7% drop in overall gaming revenue. While Microsoft has had a strong fiscal year for Xbox revenue, the company also warns that gaming revenue and Xbox content and services revenue will both decline in the next quarter.
Sony previously forecast 18 million PlayStation 5 shipments for its fiscal year 2022, and the company has yet to revise those estimates. “The supply has not been sufficient…the demand has not diminished. We really have to meet the demand, that’s the most important thing to do,” Sony Chief Financial Officer Hiroki Totoki said on an investor call today.
Sony is now hoping hardware shipments will improve later this year, as it believes supply chain disruptions are primarily affecting PS5 shipments rather than a lack of components. Sony will need to significantly improve its PS5 shipments, however, to reach its annual projection of 18 million. It must average over 5 million PS5 shipments per quarter for the remainder of the fiscal year, a target that is more than double that quarter’s shipments.
New game releases should also help the software sales side, with the highly anticipated God of War Ragnarök is set to launch on November 9 and The Last of Us Part I do it again on September 2.
While PlayStation game sales have fallen overall, 79% of PlayStation game sales were digital in the last quarter, up 11% year-over-year. Sales of PlayStation games have shifted to digital in recent years, boosted by the pandemic and a digital-only version of the PS5. Still, nearly 80% digital is a big change if it continues through 2022.
Sony’s new PlayStation Plus Extra and Premium tiers launched in the US last month, but we won’t know their full impact until next quarter. PlayStation Plus subscribers are currently at 47.3 million, down from 46.3 million at the same time last year, but down from 48 million in the third quarter of fiscal 2021. PlayStation Network monthly active users have hit 102 million in the last quarter, up from 105 million a year. over the year.