In its recently revealed quarterly report, Sony revealed to its investors that it actually sells the PlayStation 5 at a loss.
According to Sony, the “strategic price point” was used to undercut the Microsoft Xbox Series X/S releasing around the same time. The company offset its losses with gaming sales and other entertainment revenue. Incredibly, the plan paid off with 4.5 million consoles sold in 2020 and $4.6 billion USD in game sales which doubled the $2.3 billion USD generated from hardware sales. Additionally, PlayStation Plus subscription and other network revenue saw a nine percent boost overall.
Unable to manufacture PlayStation 5 consoles to meet the overwhelming demand, Sony is showing signs of a major Q4 after bringing in a record $10 billion USD profit in Q3 with all its segments with sales and operating income up 9.5 and 20 percent, respectively.
The PS5 is being sold at a loss, yet Sony’s game segment increased its operating income 50% YoY.
The reason for this is its highly profitable software and network services sales.
This was a record quarter for network sales (PS+, Full Game Downloads, DLC / Add on Content). pic.twitter.com/SIKSyWpJ48
— Daniel Ahmad (@ZhugeEX) February 3, 2021
A quick stat I can throw out based on the above.
Revenue from PlayStation Plus, PlayStation Now, PSN advertising revenue and other PSN services was $3.5 billion in 2020.
The above doesn’t include game sales or add on content sales. Just subscription revenue / network revenue.
— Daniel Ahmad (@ZhugeEX) February 3, 2021
In case you missed it, Chaos recently erupted over a Sony PlayStation 5 sale in Tokyo.