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Forums - Sales Discussion - Sony: PS5 Sales Top 20 Million Units

Kyuu said:

One thing that caught my attention is Sony's latest revenue forecasts showing some annual decreases in hardware revenue for the next few years. I guess hardware sales can still increase despite the decrease in revenue, via a combination of price drops and pushing more PS5DE's. But unless Sony is underestimating demand or overestimating the shortage, it doesn't look like PS5's peak year will approach 22 million.

I also don't see why Sony would drop the PS5 price anytime soon. Their HW revenue forecasts don't seem to match their HW sales expectations. Or at least that's how I felt about it, maybe I miscalculated.

I think that would explain the decrease in hardware revenue in the coming years. PS5DE's are even more scarce than regular PS5's. It's also worth mentioning that Sony is projecting a 7B increase for revenue in FY22 driven by hardware and peripherals. 



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@barneystinson69 I also wish Microsoft would share their numbers. It would make comparisons much easier. It's kind of lame that they stopped when they started to not do good with sales (kind of like how Sony doesn't disclose Vita numbers). At least Nintendo shares all their numbers, even disastrous Wii U sales.



Bofferbrauer2 said:
DonFerrari said:

Inflation always existed, and in Brazil for example very rarely below 4% a year, but even them electronics usually drop price every year for similar spec product, that is part of the maturity of production and cycle of renewal. I find it very hard to believe Sony would keep PS5 price the same (or increase) for 5 or 6 years. 6 months ago they already had confirmed they were breaking even on HW, so now they are likely profiting a little, sure they won't cut while they are outdemanded, but as soon as they are able to produce more than sell and the gain in sales (profits from HW, SW and royalties and subs) outdo the loss in profit from the cut on the project life of that console on the hand of customer they will cut.

That's because electronics had barely any inflation until 2020. Since then, electronics also have become a lot more expensive, as the fabs have constantly raised the prices of wafers and cut price bonuses for big and recurring clients. Add to this the fact that shipping has become much more expensive due to the fuel costs, and that several raw materials for the casings and some parts on the motherboards have become more expensive, too, and I don't see how the current consoles could drop in price anytime soon without dropping way below production price.

In the past generations, some part of the lower cost have come from cutting ports, but there ain't much you can really cut out apart from some USB ports, which these days will only save you several pennies each. And you can't really cut down on storage space to make up for it either, as it's already quite small with today's game storage space needs.

DonFerrari said:
Kyuu said:

One thing that caught my attention is Sony's latest revenue forecasts showing some annual decreases in hardware revenue for the next few years. I guess hardware sales can still increase despite the decrease in revenue, via a combination of price drops and pushing more PS5DE's. But unless Sony is underestimating demand or overestimating the shortage, it doesn't look like PS5's peak year will approach 22 million.

I also don't see why Sony would drop the PS5 price anytime soon. Their HW revenue forecasts don't seem to match their HW sales expectations. Or at least that's how I felt about it, maybe I miscalculated.

That is a great point, even more when Sony said they are ramping up production and expect to caught up again with PS4 total this year and start outpacing it from there. Perhaps exchange rates have something to do with it or will it really be heavy discount soon?

Otter said:
Kyuu said:

One thing that caught my attention is Sony's latest revenue forecasts showing some annual decreases in hardware revenue for the next few years. I guess hardware sales can still increase despite the decrease in revenue, via a combination of price drops and pushing more PS5DE's. But unless Sony is underestimating demand or overestimating the shortage, it doesn't look like PS5's peak year will approach 22 million.

I also don't see why Sony would drop the PS5 price anytime soon. Their HW revenue forecasts don't seem to match their HW sales expectations. Or at least that's how I felt about it, maybe I miscalculated.

They may be predicting price cuts to stay competitive (i.e if Microsoft does so on the X, they'll follow suite) as opposed to being $50 or $100 more expensive than the competition. Also the Switch 2 will be more a direct competitor than the Switch has been. i.e I imagine it'll be able to play a lot of third party titles without much much compromise outside of resolution (DLSS upscaled 720p) and a 30fps cap.

Inflation is always there, yes, but never really a concern as long as all is going well.

I'm thinking more along the lines of BB (above). I believe it was about 6 months after launch that Sony said they had broken even on the $500 PS5 SKU. That would've been just about the time that inflation started to rise more than normal and come into play. Only minor though, so Sony obviously didn't take the future outlook into account when it came to announcing that, or they were wrong. I'm guessing the costs of everything has risen due to shortages and inflation to the point where Sony still is breaking even, if not losing money again on every $500 unit sold.

As Kyuu said (above), Sony clearly isn't making bank on consoles and won't be for years. How much is profit from PS4 hardware and some PS5 accessories vs PS5 console losses is another question. I don't believe this is due to an upcoming price reduction soon, but because of all the issues already stated. Now how much the mass production contracts may be saving PS5 losses is another thing to take into account. If Sony has deals laid out for years or more for parts, then they wouldn't be losing as much. I'm not sure how far into the future they can lock parts in and how steady they can lock those prices in over time.

If things turn around and inflation calms down relatively quickly (it usually takes longer to drop than it did to rise) then Sony very well could drop unit pricing to get more consoles out the door asap since production should be up to par by then. That's going to lead to another few years of hardware losses again, and likely overall, since PS4 should be discontinued by then. Their saving grace is that the attach rate for games is very high for PS5, so those console losses should be made up for quickly. Not to mention that by that time, there should be entire clips worth of PS exclusives they can rapid fire, increasing software sales and overall revenue even further.



trunkswd said:
yo33331 said:

Microsoft should start posting their numbers again in the near future since the XBSX is doing quote well. I think they were giving official numbers back in the 360 generation and they stopped little after XB1 launched.

Microsoft stopped after the Xbox One hit 10 million sold. I would love for them to give actual figures again.

Actually they stopped when they said something like "by Holiday we will have shipped close to 10M" =p



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

DroidKnight said:

With inflation hitting worldwide I would expect price increases not decreases.

^



...to avoid getting banned for inactivity, I may have to resort to comments that are of a lower overall quality and or beneath my moral standards.