PlayStation Business Boosts Sony's Earnings

Thanks to the good numbers for the first half of the year, Sony is starting the second half of its fiscal year on an optimistic note and raising its forecasts. The main driver of this growth is the Games & Network Services division, i.e. the PlayStation business. However, not every area of this segment is growing.

Business is going well at Sony. This is confirmed by the figures for the second fiscal quarter and the first half of the year, which the group has now presented. Excluding the Financial Services business, consolidated revenues for the second fiscal quarter (July to September) rose 9 percent to 2.97 trillion yen (18.11 billion euros). Operating profit rose 57 percent to 389.4 billion yen (2.37 billion euros), while adjusted EBITDA rose 32 percent to 534.7 billion yen (3.26 billion euros). Cumulatively with the first quarter, Sony shows a similar development for the first half of the fiscal year, with growth of 10 percent in revenue, 43 percent in operating profit and 20 percent in adjusted EBITDA.

The reason for this growth is quickly apparent when looking at the individual segments: the PlayStation business. Quarterly sales in the Game & Network Services division rose by 12 percent to 117.4 billion yen (710 million euros), while operating profit increased by 184 percent to 89.9 billion yen (550 million euros).

It is interesting to take a deeper look at the PlayStation business. Because there it shows that growth is not taking place in all areas. For example, 3.8 million PlayStation 5 consoles were shipped in Q2 of the fiscal year. That's 1.2 million fewer consoles than in the previous year. However, this could change again in the current, third fiscal quarter, now that the PlayStation Pro has been launched. Sony seems to be providing new momentum at the right time here.

This is probably one of the reasons why the group expects continued positive development. In any case, Sony is adjusting its annual revenue forecast for the games division by 170 billion yen (1.04 billion euros). As a result, the forecast for total group revenue is also increasing by 100 billion yen (610 million euros).

In addition, the quarterly report also contains a number of other interesting figures from the games business. In Q2, 77.7 million PS4 and PS5 games were sold, 5.3 million of which were first-party titles. 70 percent of all units sold were digital sales. It is interesting to note in this context that the physical sale of games, at 34.4 billion yen, and the digital sale of games, at 258.6 billion yen, generated roughly the same amount of revenue as so-called “add-on content”. These generated quarterly sales of 300.4 billion yen. Sony uses the term add-on content to refer to all digital content that is sold via the PlayStation store and is not a stand-alone game. This includes, for example, in-game items and in-game currencies, as well as expansion packages.

There is also a current figure for the PlayStation Network, of course. As in Q1, the service also counted 116 million active users in Q2. 9 million more than a year ago. In addition, revenue from network services, at 160.8 billion yen, significantly exceeded the previous year's figure by around 27 billion yen. This indicates that the multi-tiered subscription system, which offers more content for higher subscription fees, is also paying off.

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