Sony's PlayStation game sales are lower than what the company expected.
The tech giant recently decided to revise its annual profit outlook for its gaming business by around 20% for 2022 due to an "expected decrease" in sales of first-party titles, per Engadget.
Sony now hopes its hardware sales, specifically PlayStation 5 sales, will not go down the path of its game sales and further lower its expected profits for 2022.
Sony Gaming Business Slump Facts
Sony mentioned that its gaming business, specifically its PlayStation (PS) business, suffered a weak first quarter, with the company selling only 47.1 million titles during that time, a number which also includes 6.4 million first-party games. However, these numbers are of a lower amount compared to the 63.6 million titles and 10.5 million in the same quarter in 2021.
The company blames a lack or an insufficient amount of big PS titles in 2022 compared to the amount it had in 2021.
There has been more than one big PS title released during Sony's first fiscal quarter in 2022, which are Gran Turismo 7 and Horizon Forbidden West, per The Verge. However, these games were overshadowed by a much more popular game released some time near the latter game's release: FromSoft's Elden Ring.
Sony has also noted a drop in the count of PlayStation Plus users, albeit slightly, from 47.4 million users to 47.3 million. The company also noted that this number was also accompanied by a slight decrease in monthly active users from 106 million to only 102 million.
Although the decrease couldn't be clearly explained at this time, it may have been due to the new higher-priced PS Plus Extra and Premium tiers the company introduced in June as part of a revamped PS Plus. However, the company has yet to give conclusive evidence if the higher prices have indeed affected the number of PS Plus subscribers.
Thanks to the previously mentioned sale slumps and PS Plus user count decline, Sony was forced to cut down its expectations of its annual profits outlook to 16%, per Sony's Q1 2022 earnings report.
Other factors affected the revision. The first is the negative impact of foreign exchange rates, and the second is the increase in expenses associated with the acquisition of Bungie.
Sony's Redeeming Businesses
While PS game sales saw a decrease, hardware sales, particularly PS5 sales, were found to be steadily increasing year after year with the company selling 2.4 million units this quarter compared to 2.3 million PS5 units sold in the same period in 2021.
As such, the company is hoping that the increase will continue over time as the company needs to sell over 5 million units on average to meet its May 2022 forecast - a feat the company has never done before.
You may remember that Sony predicted that the PS5 shortage would end by 2024 as the company said it now has mitigation solutions to solve the video game console's supply chain issues.
These mitigations are sourcing multiple suppliers for greater market flexibility in unstable market conditions and the ongoing logistical negotiations to maintain optimal PS5 delivery routes.
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