I mean, that's all true but we are talking about a difference of ten years not 60 years. $1 in 2014 is worth about $1.34 today, and that shrinks down to about $1.20 by the time you hit 2020. While that's significant, it's not nearly as significant as you're suggesting.

In addition, Sony is still achieving this in half of the time. Which, unless something were to happen, essentially means by this generations end their profit should be close to double what it was the PS4 generation. Maybe even higher since profit margins get higher later in the generation due to higher software sales and, now, more microtransaction purchases. 

It's about the last 2 years and the certainty it will continue this way if they don't change anything.

Both those years saw records of high profits yet lower profits than 2018-2022 and a 10-year low ROI. 

they may have made record profits but those have been achieved through record expenses lowering their overall ROI to the point investments are better made elsewhere. That's why investments to maintain the gaming industry have been cut.

I agree with your point of view, but the point of view of the investor is if I have 2 option 1) Give me $7 profit for $100 invested and 2) give me $7.01+ for 100$ invested they're going to pick the number 2 without a second though. Playstation and pretty much all of the gaming industry with few exceptions is option one.

I don't see the problem with mixing PS4 profits with the PS5[...]

It's not a problem, it's just a thing to take into account. This doc has both been prepared for shareholders and to be released publicly so it has been made so that for the public it tells the PR story of "everything is fine" but, for the investor, it tells the story of "We identified issues and we're addressing them".

Yes, launch align PS5 drives more revenue than PS4, but then with hit the initial issue again which is that his cost of operation is way higher than in the PS4 gen, to maintain the same ROI the install base needed to grow gen to gen and it's not the case here. Also, Covid made things more complicated, not only did they invest in acquisition and expansion, but salaries in IT also rose significantly during this time. I'm in IT, not gaming mind you but still, my salary rose more than 50% since 2019. So imagine if the same applies to some degree for gaming industry workers. The rising budget was already a burning issue now COVID put gasoline on it.

I define major worry as PS5 sales completely nosediving from this point forward.

This is a gamer point of view concern, This is not a concern in itself for Sony/PlayStation, even if it were to happen if Sony can maintain its revenue/ ROI through another segment of the market than this would not be a concern. A major worry for shareholder would be to see their ROI decrease without any short-term prospect of readjusting them and that's exactly what is happening now. 

Their PC support has been telegraphed for years now.

I don't think that's true, it has been discussed but Sony mostly resisted the idea preferring to keep things exclusive on the higher revenue PlayStation rather the losing 30% for the PC store. But now Sony faces the same conclusion MS faced in 2015-2016, that their console alone is not enough and they need to reach the consumer on PCs.

Their live service initiative has been telegraphed for years now.

This initiative was taken during 2020-2021 when Sony, like the rest of the industry, thought the market was going to expand substantially, that bet might not have been taken with the knowledge of 2022-2023, yet they have been taken and now they need to go by them.

Why not include Switch as well?

Okay Xbox is on the way out, we all know that.  But Nintendo are crushing it.

I know it's hard align as really the Switch is in the PS4/XB1 gen, but you get the idea.

Revenue, operating income, and ROI are higher on PS5 than PS4 launch aligned. Its not just higher revenue because of higher prices. I wouldn't say the PS5 needs to outsell the PS4 to maintain the same ROI. PlayStation Plus, higher digital sales, stronger first party sales are all major factors that significantly benefit the PS5 over the PS4. 

PS5 sales nosediving is definitely a Sony concern lol. Again, they didn't commit their single player exclusives Day One to PC, they didn't mention a PC launcher for the mid term, even their live service initiative needs PS5 to be successful. They're banking on PS5 owners for the majority of their ROI. As for their PC and live service plans, Shawn Layden has already said that PC ports got approved under his tenure, and not Jim Ryan as many speculated. Sony always wanted a slice of that live service pie, especially after a handful of F2P games like Fortnite, Apex, Rocket League, Destiny, blew up on their ecosystem.

Sony and Microsoft are in totally different positions. Microsoft needed PC but Sony wants PC to grow their profit margins. 

Given the document in the OP the ROI for 2016 was clearly better than 2023. Worst PS4 still play a major role in those revenue and profit right now, it was not the case for the PS3 going into 8th gen. 

I see those but given Sony recent action and result it is clearly not enough.

It's the loss in revenue associated with it while having to maintain high expense that would be the concern. 

Yes but they are less committed to those single player title as most of their studios are task on GAAS right now, and their single player title can now be considered only to be timed exclusive to PlayStation which is already a big change from the prior occasional PC release.

Nor will they ever do, they'll simply support PC through steam and Epic.

Hell divers 2 didn't need PS5 to be successful, but it'll help for sure.

and MS last years estimated Sony ROI to be around 8%, which in retrospect was extremely close to reality and even a bit generous, while disclosing their own to be ~12% and Nintendo to be some 20% iirc.

Do you see why PlayStation must take action here, how good it is to best your competitor in almost every aspect but at the end of the day your competitor is able to satisfy their shareholder better with more return?

Sony is in the exact same position as MS, they were simply able to keep status quo for longer due to their strength but now it is not enough.

I guess releasing very few games and upping subscription prices worked. Jim Ryan might have been a genius.

Nintendo is pretty much in its own category at this moment. Its more consumerfriendly and ate facing other challenges than most AAA gaming companies. Although Nintendo is also gearing the massive increase in de costs going forward.

The Switch is still the most accessible console, but I can see the successor facing the same problems as PS5 if it launches at 400 euro plus and almost all games are increasing in price and online costs 70 euro a year.

Fair point.  Inflation isn't as much as I would have guessed.  

You keep emphasizing RoI, but, as I've pointed out, the games themselves are not the big money makers. It's the microtransactions. RoI might be lower, that's not an excuse to cut development staff. You need a steady stream of first party content to continue to be successful, at least on consoles. How it works in the modern era is people buy into the ecosystem and then you get your money back on microtransactions. Sony, for some reason, isn't understanding this. They are hoping to cut staff, lower budgets, and keep all the actual profit. That might with this generation, but that may not work as we lead into next generation. 

I'm not saying you're wrong. I'm saying Sony is thinking of it wrong, and of course they are since investors care about immediate gains and not the long term.