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Sony is selling the PS5 at a loss, investors said



Sony shipped more than 4.5 million PlayStation 5s from the console’s November 12 launch to the end of the year, but it lost sales because the PS5’s “strategic price point” is lower than what it cost to produce.

The information was part of Sony’s quarterly report to investors, delivered in Japan earlier today. The losses on PS5 sales were not specifically broken out – and they were part of an overall Game & Network Services segment that increased operating revenues by 26.7 billion yen ($ 2.5 billion) in the same quarter in 201

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Sony’s PlayStation revenue from game sales (both PS4 and PS5, additional content included) plus larger profit margins on the outgoing PlayStation 4 accounted for more than a shortfall, the company said.

In comparison, PlayStation 4 sold more than 4.2 million units from its launch in November 2013 to the end of the year. The company said in November that the new PlayStation 5 is facing “outstanding” demand, making availability scarce, although more PS5s have been available, in whole numbers, than its predecessor. Microsoft’s Xbox Series X has faced the same problem, with the company’s CFO telling investors back in November that console shortages could last until April.

Bloomberg reported as far back as February 2020 that scarce components had driven PlayStation 5 production costs to $ 450. Analyst Michael Pachter speculated in an October interview that Sony would strike out on $ 499 PlayStation 5, but lose money on $ 399 Digital Edition as missing an optical disk drive.

Elsewhere in Sony’s financial report, the company increased its expected sales and operating revenues for the PlayStation division during the financial year ending in March. Sony now expects another 30 billion yen ($ 285 million) in sales from the Game & Network Services segment, and another 40 billion yen ($ 380 million) in operating revenue for the year.

Sony also reported a PlayStation Plus subscriber base of 47.4 million users, with 114 million monthly active users of the service at the end of the year.


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