Sony Incurring Losses on PS5 Sales

It has been a few months since the latest addition to the PlayStation family hit the stores. The opening sales of the PS5 were both magnificent as well as chaotic. Many had to return home empty-handed. However, the sales situation has improved a great deal now. Both the standard and the digital editions are now available in the market at various retail outlets.

However, Sony seems to have not been able to reap the profits off the console sales yet, as we can see from its financial results for the third quarter of the financial year of 2020.

Sony placed the prices of its new-gen consoles in a way that it would be affordable for the community amidst the pandemic situation. As a result, the company ended up incurring losses for the consoles. However, the loss did not affect Sony much because the company managed to offset the loss from its revenue.

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Sony offsets its PS5 losses from its revenue from subscriptions and game sales

Now, Sony has not released the exact amount that had gone behind the production of the consoles. The company even sustained higher general and administrative costs associated with launching the PS5.

Although the company faced losses on every unit of PS5 sold, the money it received in revenue for the services and software, including in-house game titles, was more than enough to offset those losses. In an interview with The Verge, Phil Spencer had explained how impactful the aforementioned revenue returns can be.

“The business isn’t how many consoles you sell. The business is how many players are playing the games that they buy, how they play. I think it’s easy from the outside to judge the health of our business around how many consoles any company sells. In the end, how many subscribers you have to something like Game Pass, how many games people are buying, those are much better metrics on the health of the business.”

Looks like Sony overall had a great year, with the launch of PS5 and quite an impressive lineup of in-house titles. The company sold around 4.5 million units of the console in the last year. Perhaps it would have been able to sell even more, if not for the various constraints.