PlayStation going strong despite/because of the pandemic
Best ever financial year for Sony's gaming division, 2021 might prove to be different
While the COVID-19 pandemic is not anywhere near to be contained yet in most parts of the world, Sony is entering Year Two with some impressive news from Year One: the past 12 months have been, commercially speaking, the best in PlayStation history. The Japanese giant reported a collective 34% increase in sales compared to the previous year based mostly on software (games and add-on content) but in no small part based on the hardware sales the PlayStation5 has managed to score so far.
The April 2020-March 2021 period was all pandemic-stricken, of course, so even though the PS5 surpassed in sales the PS4 during its launch window (7.8 million units compared to 7.4 million units) it bears repeating that the former's stock has been severely restricted globally since day one (and still is). Had Sony made 8 more million PS5 units available in the same timeframe, with all those millions of gamers on lockdown for months at a time, it would have probably sold those as well, breaking all sorts of console launch records.
The way things played out still helped Sony in other ways, as game sales were extremely high (2020 was the year The Last of Us II and Ghost of Tsushima were released on the PS4 as well) and PlayStation Plus subscriptions went up (now approaching 50 million consumers). Those helped offset Sony's losses on the PS5 hardware, which is sold at a loss now in order to hit the attractive €399/€499 price points of the two models. The PS5 stock shortage even helped sell one more million of PS4s (!), reaching a global base of 116 million units despite Sony not reducing that system's price or running any special promotion during its financial year.
This stellar year was an anomaly, though, as the home entertainment market had never faced the circumstances of a global pandemic before, and Sony does not expect the next 12 months to play out in the same way. It will probably be a very good year too, though, especially if the target of more than 15 million PS5 sold by March 2022 is met. The Japanese company's forecast aims for higher revenue but lower profits (as the pandemic hit software development hard and a number of new titles will not be released in 2021), highlighting a sizable investment "in first-party studios and partnerships", which will probably bear fruit in the next couple of years or so.
Other findings of interest in Sony's financial report include another rise of digital sales versus physical ones - the former accounted for 65% of all copies sold for PS4 and PS5 although, obviously, the pandemic that kept retail stores closed had something to do with that - and the rise of Sony's own software sales to almost 20% of all game sales for the two formats, approaching 60 million copies across digital and physical versions. This last extremely impressive achievement will not be easy to replicate in 2021 since Returnal or Ratcher&Clank are PS5 titles that do not address the vast user base of the PS4. Will Horizon: Forbidden West be so good on the PS4 as to make up for that? Or maybe Sony has a few aces up its sleeve that we do not know about? Now that would be news worthy of a story all on their own!