Is console hardware struggling? In its latest financial report released Tuesday, Sony revealed that hardware sales are declining, although that doesn’t spell doom for the video game conglomerate.
Hardware sales are down year over year, from 3.3 million to 2.4 million, which finance chief Sadahiko Hayakawa attributes in part to an increase in first-party software sales and the impact of foreign exchange rates. However, those same game releases, along with increased PlayStation Plus subscriptions, meant income was up 12% for games overall. Sony also revealed that PlayStation had clocked 116 million monthly active users during June, which is the highest recorded for this time of year (even though it’s down from the 118 million from last quarter).
This is in line with what we’ve been seeing in other parts of the industry. PlayStation competitor Xbox also revealed during its financial report last week that hardware revenue was down 42% year over year. The company’s overall strategy, though, comes back to services like Xbox Game Pass and Cloud Gaming, along with first-party software releases.
Also like Xbox, the PlayStation is in the middle of its life cycle, coming up on its fourth birthday. And like with previous consoles, players are expecting mid-generation refreshes. PlayStation, for example, released a slimmer PlayStation 5 with more storage in November 2023. Overall, though, the demand for new consoles isn’t as high as it was at launch.
Mat Piscatella, a video game analyst at Circana, said something similar in a post on X (formerly Twitter) on Tuesday. “Have hardware sales fallen more than expected this year? A bit, sure. But has the release slate and price discounting also been lighter than expected? A bit as well, yes.”
This has been a light year overall for first-party releases, and Sony is no exception. So far, its games include Helldivers 2, Stellar Blade, Rise of the Ronin, MLB The Show 24, and The Last of Us Part 2 Remastered. The company’s release schedule for the rest of the year includes Concord and Astro Bot, along with God of War: Ragnarok coming to PC. It’s not the most jam-packed holiday season, but PlayStation is reportedly doing well with third-party releases from other franchises.
When asked about the situation over at Sony-owned Bungie, Sony’s Hiroki Totoki reiterated what CEO Pete Parsons did in a letter announcing layoffs last week: that resources will be concentrated on developing the new extraction shooter Marathon. Bungie has also created a new team inside PlayStation Studios for an unannounced title.
