After Nintendo and Microsoft, it’s Sony’s turn to present its results. The Japanese electronics giant that branched out into video games in the mid-1990s suffers from the same curse as its next-generation American competitor: the next generation. Logically, sales of PlayStation 4 have seen a certain decline, which is reflected in the results of the whole company.
The PlayStation, Music and Pictures segments pointed at
While Xbox One sales fell 43% during the second quarter of Microsoft’s fiscal year, Sony reports that it’s seen a 25% drop in PlayStation 4 sales in the third quarter of its fiscal year. The company indeed sold 6.1 million PS4 during this period, which makes this quarter one of the least efficient since the launch of the machine in November 2013. Overall, the PlayStation division is down 20% from the previous year. In comparison, the video games division of Microsoft conceded a decrease of 21%.
If the 158.5 billion yen (1.3 billion euros) in turnover this quarter may seem impressive, they do not allow Sony to ensure the same financial health as that posted last year at the same period. Group net income almost halved from 441.2 billion yen (3.6 billion euros) to 240.3 billion yen (1.9 billion euros). However, it is important to note that during Q3 2018 which serves as a comparison element, Sony had benefited from a reimbursement of 100.7 billion yen (833.4 million euros). Pre-tax profit is actually rather close to that of last year (- 8.87%).
The Gaming department is not the only one to be blamed for this general decline, since the segments Music (- 75.36%), Pictures (- 53.21%) and Financial Services (-13.88%) also recorded underperformance in terms of operating profit. The video game being very important in the results of Sony, it is normal that this end of cycle is felt in a consequent way on the figures. as a reminder, it represents 25% of the company’s turnover (compared to 9% at Microsoft).
| Operating profit, Q3 2019 | In millions of yen | In millions of euros | Variation / Q3 2018 |
|---|---|---|---|
| Game & Network Services | 53,450 | 442.8 | – 26.86% |
| Music | 36,250 | 300.3 | – 75.36% |
| Pictures | 5,422 | 44.9 | – 53.21% |
| Electronic Products & Solutions | 80 336 | 665.6 | + 21.33% |
| Imaging & Sensing Solutions | 75 182 | 622.9 | + 61.65% |
| Financial Services | 32,634 | 270.4 | – 13.88% |
| Other | 20,673 | 171.2 | + 238.68% |
| Total | 303,947 | 2,518 | – 21.76% |
The calm before the storm
The foreseeable slowdown in sales of PlayStation 4 is more intense than what Sony initially envisaged, the Japanese group having lowered by 3% its prospect of revenue in the Gaming compared to previously published forecasts. It remains to be seen whether the outputs of The Last of Us Part II, Final Fantasy VII Remake and Ghost of tsushima will allow the company to make a smooth transition to PlayStation 5. Sony can nevertheless count on its number of subscribers to PlayStation Plus to boast, since it is 38.8 million, a record since the launch of the service. As with Microsoft, subscriptions therefore seem to be on an upward slope.
As we explained in our previous article, sales of games on PS4 fell slightly by 7%, while consumption via the dematerialized has progressed. It went from 37% a year ago to 49%. On the PlayStation 5 side, the Japanese group has remained very discreet. Hiroki Totoki, chief financial officer of Sony, reiterated during the conference dedicated to the results aiming for a smooth (but rapid) transition between the PS4 and the PS5. Regarding the price of the machine, Hiroki Totoki recognizes that several external factors can influence the group’s strategy. If production costs can be controlled, the price of the future rival Xbox Series X, it still remains officially unknown. The Japanese manufacturer knows how crucial a good price is in the success of a new console, he who offered a PlayStation 4 for 100 euros less than the Xbox One in 2013. On the Microsoft side, the American firm does not seem also not wanting to lose the price war, as Phil Spencer conceded to our microphone last November.
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Despite slowdown in PlayStation 4 sales, Sony forecasts slightly higher than expected sales (for the fiscal year ending March 31, 2020), due to higher sales in financial services and solutions imaging. These performances should compensate for the decline in the video games and electronic solutions segments. Operating profit should also be higher than expected, despite a more costly than expected restructuring of the group. The green outlook allows the electronics giant to forecast pre-tax profits of around 860 billion yen (7.1 billion euros) for the next quarter.
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Through Carnbee, Journalist jeuxvideo.com
MP
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