Analysis: Sony’s full year results see dip for end of PS4 era but reassure with a strong digital performance

Sony’s FY2019/20 results are out and, as expected, it’s something of a transitional year for the platform. Hardware sales fell in the face of the upcoming PS5 and its first-party output was distinctly down too, with the delay to The Last of Us Part II (whose original February release date would have fallen in this year) being a notable blow to the year’s figures.

Highlights from the figures include:

– PlayStation 4 sales fall from 17.8m to 13.6m units year-on-year
– Full game software falls from 257.6m units to 245m units
– Digital download ratio shoots up from 37 to 51 per cent
– Q4 PS Plus subscribers up from 36.4m to 41.5m

Speaking on coronavirus Sony gave a series of short messages regarding the impact of the pandemic upon its business to date and going forward. PS4 hardware sales are “trending well” while “network services revenue increased.” Which reflects what we’ve been seeing anecdotally from the industry.

Even more encouragingly PS5 is “on track for launch in this holiday season” and there are “no major issues in game software development at this point.” Which mirrors what developers have been telling us about their efforts under lockdown.

GENERATION CHANGE

So back to looking at those main points. Hardware sales were bound to fall over the last year. The company has actually done its best not to cast a PS5-shaped shadow over the industry in the last 12 months, with the reality being more that the key markets are largely saturated with PS4 owners, and there was little in the way of huge exclusive titles to help bring in the last few refuseniks.

Given that’s the case the fall from 17.8m to 13.6m is actually pretty good going.

Sony gave no indication of how many PS5 units it forecast to ship this year. But given the continued success of PS4 and the potentially high price of PS5, I’d guess that it would be delighted to hit similar figures to the PS4 launch, where it had a clear price and hardware advantage over its main competitor. So 6m PS5 units or so by the end of FY2020/21, though the total PS4+PS5 sales is likely to be lower than PS4 alone this year.

Full game downloads were down, despite the platform adding another 13.6m PlayStations to the install base. That’s no great surprise with Sony not placing a single title in the UK’s top ten selling games for 2019 (though neither did Microsoft to be fair). Days Gone and Death Stranding were its two major launches during the period and sales for both fell off fairly sharply after launch (based on UK physical data at least).

DIGITAL DELIGHT

All that said. PlayStation looks to be in a great position going forward with a couple of key metrics heading the right way (from the point of view of Sony, publishers and developers at least).

The percentage of full games sold as digital downloads shot up from 37 to 51 per cent, With the figure in Q4 hitting a massive 66 per cent. That’s great news for many, with digital titles returning better revenue to most of the industry (and killing off profitless pre-owned sales) – not so good for retail of course.

However, it should be noted that heavy discounting of older titles online could be skewing this unit-based, rather than value-based, figure. And we may well see a correction on the launch of PS5, with gamers tending back to the security (and re-saleability) of physical titles when asked to pay out the full retail price to cover next-gen development costs.

Of even more delight to Sony will be the ever-increasing numbers of PS Plus subscribers, which jumped to 41.5m by the end of Q4, as coronavirus started to bite. That’s ahead of a steadily rising trend, and provides the kind of regular income that the games industry has long looked for to smooth out the bumps of big titles and hardware generations.

In these key respects then FY2019/20 was a mission success for Sony.

In other Sony news today, the company rebranded its first-party studios.

About Seth Barton

Seth Barton is the editor of MCV – which covers every aspect of the industry: development, publishing, marketing and much more. Before that Seth toiled in games retail at Electronics Boutique, studied film at university, published console and PC games for the BBC, and spent many years working in tech journalism. Living in South East London, he divides his little free time between board games, video games, beer and family. You can find him tweeting @sethbarton1.

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