Sony has reduced its annual profit forecast, citing weaker PlayStation game sales. The forecast comes as Sony revealed that it shipped 2.4 million PlayStation 5 consoles in the most recent quarter, up only 4% from the 2.3 million shipped in the same period last year. PS5 lifetime shipments have now surpassed 21.7 million.
While hardware sales are slightly higher year over year, software sales have dropped by 26%. In an investor call, Sony blamed the game slump on a lack of big PlayStation titles this year compared to 2021 and less time spent playing games in general, which was backed up by a 3 percent drop in monthly active PlayStation Network users to 102 million. Sony’s exclusive Gran Turismo 7 and Horizon Forbidden West titles were released earlier this year, but Elden Ring arrived at the same time across multiple platforms and stole the show.
According to Reuters, Sony has reduced its annual profit forecast for its gaming business by 16 percent, citing another drop in game sales in the coming quarter as well as costs associated with its recent $3.7 billion Bungie acquisition.
Sony’s PlayStation game sales are the latest indication that the gaming industry is slowing after a strong start during the pandemic’s early stages. Microsoft does not disclose its own Xbox hardware shipments, but the company saw Xbox hardware revenue drop 11% in the most recent quarter, along with a 6% drop in Xbox content and services revenue and a 7% drop in overall gaming revenue. While Microsoft had a strong fiscal year for Xbox revenue, the company is also warning that gaming revenue and Xbox content and services revenue will both decline next quarter.
Sony now expects hardware shipments to improve later this year, believing that supply chain disruptions, rather than a lack of components, are affecting PS5 shipments. To meet its 18 million annual projection, Sony will need to significantly increase PS5 shipments. It needs to hit an average of more than 5 million PS5 shipments per quarter for the rest of the fiscal year, which is more than double this quarter’s shipments. New game releases should also help software sales, with the highly anticipated God of War Ragnarök set to release on November 9th and The Last of Us Part I remake set to release on September 2nd.
The company’s games underwhelmed in the April-June quarter with 47.1 million sales of PlayStation 4 and 5 titles, down from 63.6 million in the same period a year ago.
Play time across PlayStation products was down 15% in the quarter. pic.twitter.com/G6iWRQwfWN
— JayRock ☻ (@JAAY_ROCK_) July 29, 2022
While overall PlayStation game sales have decreased, 79 percent of PlayStation game sales were digital in the most recent quarter, an increase of 11 percent year over year. PlayStation game sales have shifted to digital in recent years, aided by the pandemic and a digital-only version of the PS5. Still, nearly 80% digital is a significant shift if it continues through the rest of 2022.
Sony’s new PlayStation Plus Extra and Premium tiers debuted in the United States last month, but their full impact will not be known until the following quarter. PlayStation Plus subscribers currently stand at 47.3 million, up from 46.3 million at the same point last year but down from 48 million in fiscal Q3 2021. Monthly active PlayStation Network users reached 102 million in the most recent quarter, down from 105 million in the previous year.