Japanese tech giant Sony has published its latest earnings report, showing that sales of PlayStation 5 consoles fell year-on-year in the first quarter of 2024, though revenue from its gaming division rose 12% thanks to growth elsewhere.
The recently released fiscal year 2024 first quarter profit report Sony’s PS5 console sales have fallen to just 2.4 million units, compared to 3.3 million units in the same period last year. That’s a sales decline of around 27%.
The console is also underperforming by about 46% compared to the previous quarter, when it sold 4.5 million units. These latest figures fall short of the previous estimate that the system would sell 3 million units this quarter.
Console sales may be down, but Sony’s gaming division is still performing well. Revenue is up about 12% overall, largely thanks to increases in software sales and network services (including PlayStation Network and PlayStation Plus sales in addition to ad revenue).
While software sales have increased overall, sales of physical games have continued to decline. They generated just 20,629 million yen this quarter, compared to 24,402 million yen in the same period last year. The company now states that 80% of all game software sales on both PS4 and PS5 are digital downloads.
Analysis: Towards a digital future?
While it may not have met expectations, a console sales decline like this isn’t necessarily unusual. The PS5 has been on the market for nearly four years now and is quickly approaching what many would consider the middle of its life. It’s understandable that consumer interest in the console is waning.
There could also be a PS5 Pro coming in the near future, which would likely boost sales significantly as many current owners look to upgrade their old equipment.
The increase in the ratio of digital to physical game sales is a much more worrying trend. A vocal minority of players prefer to buy physical games, although the reality is that physical game sales have been steadily declining over the past financial year. If this pattern continues, we are likely to see more digital releases and support for physical games could wane as we approach the next generation of consoles.
