Sony is Fueling Revenue to Strengthen “First-Party Software Development” and Live Services

Sony has been having a booming year. With the release of their Q1 reports for this fiscal year, they have shown remarkable achievements. One of them is that the PlayStation 5 had the highest recorded sales in Q1 from any console in history. This has truly set a precedent for any future consoles yet to come.

While Sony’s PlayStation sales are going up, their profit is still taking a hit. Sony’s President, Hiroki Tokoki, answered this question in the FY 2022 Earnings Announcement.

Sony’s president answers some burning questions

Hiroki Totoki (President), Naomi Matsuoka (Senior Vice-President), and Sadahiko Hayakawa (In charge of Finance and Human Resources) delivered the FY 2022 Earnings Announcement presentation. Totoki was questioned why the company’s earnings were declining. This should not have happened because the company’s revenue was increasing considerably.

Tokoki articulated the causes behind this situation quite well. He attributed the increase in game production expenses as the reason. This was previously verified by Shuhei Yoshida.

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The former president Yoshida claimed the latest God of War cost PlayStation almost $200 million. This was far more than the $44 million required for God of War III. Totoki has also provided an explanation and a solution for the increasing game production costs.

Sony has laid out the plans for future profit sustainability

He stated Sony is planning to increase first-party software development. This would mean fans would be getting more titles developed by the PlayStation brand. It can be possible in two ways. One is if they start acquiring more studios, following suit with Microsoft. Else they can increase the staff intake and build more titles independently.

The option of acquisition has divided the opinion of fans. While some say they are taking the right steps toward building their future by making more acquisitions, some have blatantly called out Sony for mentioning acquisitions.

Totoki also bets on the sale of PS5. While the PS5 has set records, he believes they can still do better. “I think we have a good chance to exceed 60 million units, and as you may know, we sold more than 100 million units in the era of the PS4,” he said.

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What are your thoughts on Sony investing in the future and increasing first-party services? Let us know in the comment section soon.