The $499 PlayStation 5 is Already Profitable

Posted on August 4, 2021 by Paul Thurrott in PlayStation with 18 Comments

While Microsoft is looking to its cloud-based future for videogame profits, Sony has consistently found them in the console market. And it has done so, again—and quite quickly—with the higher-end PlayStation 5, according to disclosures it made during its quarterly earnings announcement.

Sony earned a net income of $2.6 billion on revenues of $20.7 billion for the quarter ending June 30. Both are significant gains over the year-ago quarter, the results easily surpassed analyst expectations, and Sony is now raising its profit forecast for the current fiscal year, which ends in March 2022.

The big news, of course, is the PlayStation 5, which has sold faster than any previous PlayStation console despite a global component shortage. Sony’s Game & Network Services division, which is responsible for PlayStation, reported $5.6 billion in FQ1 revenues, a record for the quarter and the second-best quarter ever for the division.

Sony had previously announced that it had sold over 10 million PS5 consoles, and it noted today that 2.3 million of them came during the previous quarter. Game makers also sold 63.6 million PS games in the quarter, 10.5 million of which were first-party exclusives, and 71 percent of which were digital.

But here’s the most impressive stat from the quarter: The PlayStation 5—or, at least the $500 version with the optical drive—is already profitable. It’s no longer sold at a loss, something that Sony has achieved with each of its console generations. And something that Microsoft has acknowledged it has never done.


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Comments (18)

18 responses to “The $499 PlayStation 5 is Already Profitable”

  1. tallguyse

    It’s even more profitable for the scalpers who are selling them all on eBay.

  2. hrlngrv

    Someone has to ask: what if Apple or Google or Amazon bought Sony?

    • ringofvoid

      Apparently, the Japanese government already asked this question. In 2019, they limited foreign investors to holding 10% ownership of tech & certain other sensitive industry companies.

  3. faustxd9

    I would have thought that with both the "blade" based Xbox series and the X&S consoles that MS would have started making the hardware profitable. However, there could also be a difference in accounting at play with Sony just reporting individual console profit vs. MS rolling in all "Xbox activities" and R&D into the profitability number.

  4. bart

    What surprised me more are the declining subscribers numbers for PS Plus.

    • bart

      47.6 million to 46.3 million for those interested.

      • bettyblue

        Game Pass will eventually make a difference.

        I used to buy both consoles. I specifically bought the PS for MLB the Show and I would pick up one or two other exclusives if they looked good but it was for MLB the Show that I got the PS.

        Now that MLB the Show is on Xbox and Game Pass at that, on launch day....I doubt I will get a PS5 this round. I also like to play multiple Bethesda games, and now they will be both Xbox exclusives and on Game Pass day one...which makes for more reason NOT to get a PS5.

        • yoshi

          I've always had both as well, and still do this time around. But so far I've barely found a reason to use the PS5. Which kills me because I spent so much on it, and it just collects dust. It's hard to justify using it though with their lame backwards compatibility and the upcharge for PS5 enhancements on older games.

          Microsoft is just hitting their stride so well this gen(so far). I like knowing when I buy a game, I'll have the best version of that game going forward. And then, of course, Game Pass....

  5. vladimir

    I wonder how this is even possible. The cost of Seriex X and PS5 are very similar and so are the hardware specs. Does it mean that Sony buys the components at a lower cost?

    • duncanator

      Maybe one can actually buy a PS5 but can't find a Series X? For the first 6 months of this year I tried to purchase a Series X with no luck. I eventually just gave up and will likely wait until I can walk into Best Buy, see one on the shelf, and buy it. I got tired of hitting multiple websites several times a week only to see that it's sold out everywhere.

      • bettyblue

        Actually where I live its much easier to now get a XSX vs PS5. PS5 is pretty much an ebay only purchase around here (midwest). I have two friends that recently got a XSX from local retailers. They hounded them for 4-6 days, constantly checking websites etc. They got them though.

        If you go on to Ebay the average selling price for a XSX is less than that of the PS5.

    • yoshi

      The manufacturing costs could be less for PS5. At least that’s my guess.

      • MoopMeep

        Probably because the GPU isn't as good in the PS5.

        I think this is probably why they have sold more consoles too. Not as complex, easier to make.

        I think yoshi is right too. Sony is more of a hardware company, Microsoft is more software.... so Sony probably is better building hardware since they have doing it longer.

        All speculation of course... don't really know without more info from sony and microsoft.

        I always wondered which components they have trouble getting that cause them not to be able to manufacture enough consoles.

        • waethorn

          The SSD is more expensive. It's bigger and has a less dense construction for the benefit of air-flow though, so shrink-down wouldn't be as expensive, which is likely where they're seeing cost savings.

        • bettyblue

          I would wager that both the XSX/S and the PS5's are made in China....and not by Sony or Microsoft. It would not surprise me if the two factories are in the same building or next to each other.

          Sony is using the less powerful parts as well, slower CPU and the GPU has 36cu vs 52 in the XSX. Those two components are cheaper for sure than the same in the XSX.

          • waethorn

            Sony doesn't really build anything. No computer company does anymore. It's all subcontracted to Chinese, Taiwanese, and sometimes Thai component manufacturers, and assembled in China. What you think of as a computer or electronics manufacturer is mostly just an office of executives and some basic PR staff, and support is contracted out to a call centre in India while repair services are handled by another ISO-900x warehouse company.

            • MoopMeep

              They build raspberry pi…. Or at least they used to. There is a interesting video on youtube about it…. Its probably at least five years old but still cool to watch

          • MoopMeep

            At least for the US model of the PS5. Its assembled by hongfujin (which I guess is part of foxconn) in China. I would still assume that Sony is very involved? They probably give instructions on how they want things done. Probably setup the contracts for all the different parts. They probably even make some of the components in sony factories to be shipped for final assembly in China.

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