PS5 entering "Latter Half" in lifecycle, Struggling sales with no price drop, Pro Version in 2024 to compete with Xbox?

[BIOHAZARD-R-US]

Just a minor bit of console news for everyone. Sourced from Sony Investor Call Report and Sony Q3 2024 Earnings Call Transcript.

 

Sony had an official investors report recently and stated the PS5 undersold during the 2023 holiday season, despite being fully restocked and available for the first time since its launch. Sony has lowered it's estimate number of sales from 25 million units to 21 million units for its current fiscal year ending in March 2024. They also saw significant revenue drop offs, then doubled down on the disappointments by stating that there are no plans for a major sequel/spin-off title to one of their flagship franchises until at least Spring 2025, and that a price drop is unlikely due to the PS5's die size (I had to look this up. Basically it just means the chip size for things like the GPU, and the larger the sizes the more significant the cost.). Sony's CFO said that shrinking the PS5 die size would be a much more expensive task than the PS4, which probably explains why the PS5 "Slim" that was recently released last year was not significantly smaller and also offered no true upgrade in internal power. With the PS5 already seeing a price increase in dozens of markets, beefing up the main components of the hardware would've probably resulted in both an inability to shrink the console's overall size like they did combined with another price hike. 

 

As for Xbox, despite announcing that some of their first-party games will be coming to PlayStation, they've seen an increase in revenue from both hardware and software sales, while both Nintendo and Sony had their hardware revenues decline significantly. Microsoft's Phil Spencer has also discussed on a recent Xbox Podcast that Microsoft and the future of Xbox will respect players' investment into their console legacy and game selection. With that declaration also comes the leaks and subsequent announcement of a new Xbox Series refresh due in Fall 2024, codenamed Project Brooklin, a digital only cylinder-shaped console featuring a 2TB SSD, upgraded WiFi antennae, 15% reduction in power usage while on and 20% reduction in power usage while in rest mode compared to current usages, as well as a die shrink for improved efficiency. his new console will be paired with a redesign to the controller, dubbed Sebile. 

 

Obviously attention would turn right back to Sony for a potential PS5 refresh in the same vein as the PS4 Pro, which was also released right around the same 3.5-year time after its launch that the PS5 is currently at. The PS4 Pro saw a boost to hardware sales as they were beginning to dip, and analysts are speculating that while a costly endeavor for Sony, it could be what's needed to boost sales for the PS5. A stronger powerhouse of a console paired with the upcoming GTA6 release would also theoretically drive console sales as well, and releasing the new console refresh a few months before that major release would allow people enough time for financial purchasing power, stock availability, and firmware updates. GTA6 is still on track for a 2025 release, with Take-Two CEO Strauss Zelnick suggesting "2025 will be a pivotal moment for the company's fiscal year" and thus hinting at a potential March 2025 release, which coincides with Sony's own statement of Spring 2025, though remember that was more related to first-party titles. This is an abnormal release window for GTA games though, as since October 1999 there have been 5 GTA games released in either October or September. GTA4 was the only one to buck that trend with an April 2008 release. This assessment, while logical on many aspects, does contradict Sony's direct statement about the die size reduction, which the PS4 Pro and now the Xbox Series Project Brooklin console have featured.

 

Additional Sources:

GameRant - Sony Addresses Possibility of PS5 Price Drop

The Street - Sony Struggling To Sell PS5s That Were Once In High Demand

CNet - Sony's PS5 Entering "Latter Half of Lifecycle, What It Means

TechRadar - Xbox Will Respect Investments People Have Made and Encourage Backwards Compatibility

Metro - New Xbox Console Out This Year, Boasts Largest Technical Leap

CNBC - Sony Expected To Release Pro Version of PS5 This Year After Cutting Outlook

Techopedia - GTA 6: Release Date, Map, Trailer, Leaks and Rumors

Bloomberg (subscription required) - PS5 Outlook Cut As Sales Dwindle

Edited February 23 by BIOHAZARD-R-US
Info correction, Sony & Bloomberg sources thanks to DaivRules

[DaivRules]

It's frustrating all those articles only have one source, the Bloomberg article, yet none actually have the transcript to use the actual words used.

 

And if people actually want to feel a difference in gaming between generations, we have to get out of this cycle of Pro releases.

 

[ZombiJoel_Tlou3]

Wonder what would've been if covid never released

[sepheroithisgod]

Feels more like investor talk to keep sales forecasts realistic. It makes sense that PlayStation and Nintendo are declining, compared to Xbox, they have a lot more room to decline.

[DrBloodmoney]

Silly Sony...

...you don't need to release a PS5 Pro to compete with Xbox...

 

...you could just wait until the PS5 sales drop by a full 50%, and then it will be competing with Xbox.

[Beyondthegrave07]

I am one of those who have held off on buying a PS5 for a few reasons.

 

Most games I've been interested in and purchased have been available for both PS4 and PS5 (Elden Ring, Persona 3 Reload, Resident Evil 8, Street Fighter 6, etc.) and choosing whether to upgrade to a new system for $500 and pay $70 for games or continue to pay $60 at a lower power... It doesn't feel necessary to upgrade. It's not that I can't afford one; it just feels like a waste if I'm going to continue to play PS4 games on it. My apartment isn't that big either so finding a place for it where it would be useful (it's too big to fit where the PS4 currently is) would be hard.

 

I wonder if others are like me just content with playing games on an older system and don't see a good reason to upgrade...

Edited February 23 by Beyondthegrave07

[KenjiCBZ]

No Ps6 before 2030, thanks.

[BIOHAZARD-R-US]

41 minutes ago, DaivRules said:

It's frustrating all those articles only have one source, the Bloomberg article, yet none actually have the transcript to use the actual words used.
 

I did not even realize this

[Lord_of_Ra]

And this is also why they also had to quit releasing ps4-ps5 games much earlier as well, and more companies needed to take the leap in graphics (at least), and quit being so reserved all the time.

 

Let’s be real, most Ps5 games just feel like somewhat enhanced ports of their ps4 counterparts, which already had a pro version that makes things worse since there’s barely a change.

A lot of the rest feel like they could run on a ps3, and dare say a ps2 (looking at the run-of-the-mill Japanese companies that release the usual JRPG stuff).

 

Lets not even talk about those companies that release PS2 games on a Ps5 to scramble

some money…

 

Of course people won’t buy an expensive console if they already have a decent one with a lot of power and almost the same quality.

 

Ps5 is feeling like the console version of the Vita. So much power in their hands, but many didn’t want to fully handle it.

 

Im betting that if a PS5-pro or Ps6 releases, some, if not a lot of their games will be playable even on Ps4.

 

What’s the point of releasing even more power if games are stuck on being “cross-gen” and many devs won’t take advantage of it?

[DaivRules]

25 minutes ago, BIOHAZARD-R-US said:

I did not even realize this

Here is an officially translated source of the official document Bloomberg is possibly interpreting so you can add it to the opening post: https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/23q3_qa.pdf

The Bloomberg article is paywalled, so it's taking me a bit to find what they're using for their source.
 

Here is the actual call transcript source so you can read it without Bloomberg writers influence and then further interpretation from those other writers: https://seekingalpha.com/article/4670084-sony-group-corporation-sony-q3-2024-earnings-call-transcript

[MidnightDragon]

Well, it does make sense. PS4 will be four this fall, so about halfway through its normal lifespan. Still, like Daiv said, a lot are posting that without bothering with the context. Most of it seems like investor talk. Wasn’t meant for the normal people.

[BlindMango]

1 hour ago, DaivRules said:

It's frustrating all those articles only have one source, the Bloomberg article, yet none actually have the transcript to use the actual words used.

 

This is so annoying with games press, they just copy and paste what the first article says and they never look at the source. I remember there being some other recent stories with inaccurate headlines all over because of this very thing

[DaivRules]

 

2 minutes ago, BlindMango said:

 

This is so annoying with games press, they just copy and paste what the first article says and they never look at the source. I remember there being some other recent stories with inaccurate headlines all over because of this very thing

Yeah, that's how we get so many people thinking this is what Sony said:

 

1 hour ago, BIOHAZARD-R-US said:

stating that there are no plans for a major internal release title until at least Spring 2025,

 

When the actual quote is:
 

Quote

"But while major projects are currently under development, we do not plan to release any new major existing franchise titles next fiscal year, like God of War Ragnarok and Marvel's Spider-Man 2." 

 

So, what is obviously being referred to as no major sequels/prequels/spin-offs, has been changed to no major internal release titles. The interpretation is vague enough to not be called out as completely false and possibly referred to later as being true. 

 

 

Although, much like trailers/teasers/leaks, I don't pay too much attention to promises and forecasts. I'll check things out once things actually release/happen. Before that, it's all just noise.

 

[Jeanolt]

I haven't bought a PS5 because of economical reasons, but in the fictional scenario of me having the money to do it... I don't think I would.

 

I'm still playing PS4 games, there were a lot released in the 2021-2023 period where PS5 should have been stronger, and the amount of exclusives games that I'm losing on are not worth of the investment. There are only a few I'm interested on, one of them hasn't released yet, and will reduce their price as time goes by.

 

I'll probably buy it in a few years, because there's really no rush on doing it if you play many different genres. Now, if you only care for the AAA, then you could probably go for it.

 

Edit: also there are games still releasing in 2024, like Persona 3, Prince of Persia or the latest Yakuza.

Edited February 23 by Jeanolt

[Moridin83]

1 hour ago, Beyondthegrave07 said:

I am one of those who have held off on buying a PS5 for a few reasons.

 

Most games I've been interested in and purchased have been available for both PS4 and PS5 (Elden Ring, Persona 3 Reload, Resident Evil 8, Street Fighter 6, etc.) and choosing whether to upgrade to a new system for $500 and pay $70 for games or continue to pay $60 at a lower power... It doesn't feel necessary to upgrade. It's not that I can't afford one; it just feels like a waste if I'm going to continue to play PS4 games on it. My apartment isn't that big either so finding a place for it where it would be useful (it's too big to fit where the PS4 currently is) would be hard.

 

I wonder if others are like me just content with playing games on an older system and don't see a good reason to uograde...

I'm in the same boat. There haven't been enough titles to make me need a PS5 yet. The one thing that's starting to change that though is physical releases skipping the PS4. I'm not anti-digital, but if I really like a game, I want a copy that's not reliant on Sony to stay available, and that's getting a little harder. Unicorn Overlord is the first one I really wanted that didn't have a PS4 physical copy, but if that trend accelerates, I may have to bite the bullet.

[Property_Damage]

Compete with xbox?  Game pass only has surprisingly good numbers because of the sheer amount of pc users

xbox is too busy phasing themselves out

soon they will just be a publisher

[BIOHAZARD-R-US]

2 hours ago, BlindMango said:

 

This is so annoying with games press, they just copy and paste what the first article says and they never look at the source. I remember there being some other recent stories with inaccurate headlines all over because of this very thing

 

2 hours ago, DaivRules said:

Yeah, that's how we get so many people thinking this is what Sony said:

stating that there are no plans for a major internal release title until at least Spring 2025,

 

When the actual quote is:
"But while major projects are currently under development, we do not plan to release any new major existing franchise titles next fiscal year, like God of War Ragnarok and Marvel's Spider-Man 2." 

 

So, what is obviously being referred to as no major sequels/prequels/spin-offs, has been changed to no major internal release titles. The interpretation is vague enough to not be called out as completely false and possibly referred to later as being true. 

I updated the original post. Thanks for the clarification

[DeepEyes7]

Sorry but I feel this compendium a little biased, if PS5 is doing bad then XSX is a walking corpse

[TJ_Solo]

Their goal was 25 million in a quarter(never been done before).

They got to 21 millin in a quarter(never been done before).

They are sellong PS5s at a faster rate than PS4s but not passing the total sold yet due to the launch supply issues.

Their hardware profits are smaller, also due to supply issues stemming from global semiconductor shortages and costs for semis staying high.

 

They are doing well but want to do better. I'd suggest blocking anyone claiming that PlayStation is failing or struggling. 

 

I don't see anything about a PS5 Pro in any of the earnings reports or official statements. Nothing to comment on. 

[DaivRules]

On the question asked in the title: This Project Brooklyn leak looks more like a Xbox slim (power and size reduction) version to compete with the slim PS5 than a Pro version that Sony needs to come out a PS5 Pro needs to compete with.

 

 

[F1rstinFlight]

I think the more concerning thing from the recent earnings call is that Sony’s operating margin for the gaming business is down to 6% which is a near decades low. It had been at 12-13% in recent years until a decline starting in 2022. This caused the market cap of Sony to drop by $10 billion in stock value. This is a significant issue.

 

I’m starting more and more to think that Jim Ryan was asked to retire because the corporate leadership in Japan were looking at the numbers and didn’t like the direction the PlayStation business was going. Games are getting more and more expensive to make so the number of copies you need to sell to break even keeps going up. PlayStation’s gross income has been seeing an increase but not the profits.

 

I don’t think the push to get into the live service space is a bad idea but the number of live service games Sony was trying to develop simultaneously was concerning. We’ve already seen some of them delayed and cancelled. But the insane success of Helldivers 2 shows how lucrative these can be when done right. I think Sony is going to have to be more aggressive putting their games on pc much sooner than they have been so far. Steam has a ridiculous number of monthly active users and Sony needs to get a bigger return on its software. 

[BIOHAZARD-R-US]

21 minutes ago, DaivRules said:

On the question asked in the title: This Project Brooklyn leak looks more like a Xbox slim (power and size reduction) version to compete with the slim PS5 than a Pro version that Sony needs to come out a PS5 Pro needs to compete with.

 

 

Based on the images and few details I did see in one of the articles I linked was that there is also a standard 2TB SSD and an upgrade to its WiFi capabilities. Certainly nothing in the way of actual performance like a CPU/GPU upgrade. It feels slightly more "upgraded" than the PS4 to PS4 Slim for more so for those two aspects. The reason for the title phrasing was because the PS5 has already had a "Slim" version if you want to really call it that, as well as too a different article with expectations of a Pro version soon.

[ChibsSoA]

1 hour ago, F1rstinFlight said:

I think the more concerning thing from the recent earnings call is that Sony’s operating margin for the gaming business is down to 6% which is a near decades low. It had been at 12-13% in recent years until a decline starting in 2022. This caused the market cap of Sony to drop by $10 billion in stock value. This is a significant issue.

 

I’m starting more and more to think that Jim Ryan was asked to retire because the corporate leadership in Japan were looking at the numbers and didn’t like the direction the PlayStation business was going. Games are getting more and more expensive to make so the number of copies you need to sell to break even keeps going up. PlayStation’s gross income has been seeing an increase but not the profits.

 

I don’t think the push to get into the live service space is a bad idea but the number of live service games Sony was trying to develop simultaneously was concerning. We’ve already seen some of them delayed and cancelled. But the insane success of Helldivers 2 shows how lucrative these can be when done right. I think Sony is going to have to be more aggressive putting their games on pc much sooner than they have been so far. Steam has a ridiculous number of monthly active users and Sony needs to get a bigger return on its software. 

 

I think their direction is fine, 2023 just wasn't a good year for first party for them. Margins shrinking doesn't matter as much as overall profit does. A game selling 1 mil copies at a 6% margin or 500k copies at a 12% margin is the same profit for them.

 

They really need to clean up the store though. Their sale methodology is outdated and their willingness to let 10 shovelware games on there for every 1 decent game is flat out hurting their sales. Who is going to sift through 1000+ items that are mostly garbage DLC that's on sale every week? Why keep low quality games on the store period, they're not selling enough to make Sony anything worthwhile and all they do is deter uninformed consumers into thinking indie games are not worth looking at. Allowing anyone and everyone to make and self publish games is a terrible idea, so long as there is nobody doing quality control when it comes to what makes it on the storefront. Everyone is imitating steam thinking it works, but in reality steam shouldn't be doing it either - they just have a way bigger install base so it makes it look like their strategy is king. At least twice a week I sort the store by new games, and 99% of what I see week after week are games from inexperienced developers that I can't imagine more than 10 people would buy at best.

 

They also should have not bought Bungie without doing proper research. Anyone could have looked at the Bungie sales data and projections and see that their projections were extremely fabricated (maybe to try to push the sale). Anyone monitoring player data or the average opinion of a D2 player in 2023 could see things were downtrending hard. Whoever gave the OK on that is an absolute moron, they will never make their money back.

 

Their margins are shrinking because both companies have conditioned people to wait for sales too. That's on publishers as well. And many AAA games have been coming out broken or unfinished, and when word of mouth spreads those games don't sell. The industry needs an ass kicking, and I think the downfall of CoD and colossal failure of almost every single live service attempt is a step in the right direction.

 

Games costing more to develop is not Sony's problem (outside of first party), it's the developers/publishers problem. Don't make such expansive games if you know it's not going to be reviewed well. Don't spend 50 million dollars on marketing when gamers are really only looking at metacritic and word of mouth from friends for their purchasing decisions. These companies should have been investing in new engine YEARS ago and chose not to because of the cost. Nobody sees Kojima complaining about cost to develop games and his games look and play better than most others. It's time to abandon these ancient engines that are held up by glue. You wouldn't need to pay so many devs, or spend so much time making a game, if your engine wasn't so outdated. People are surprised that Destiny 2 is held together with duct tape, meanwhile they are using the Halo 1 engine still. Legit.

 

Then you have games like Callisto Protocol that just get lambasted and made into a joke by the internet gaming community, even though the game isn't that bad at all, actually quite good. But it's also another example of management stupidity - you make this awesome looking game that had everyone hyped with a trailer, then you don't send review copies out and every reviewer points out that most of the combat is melee based and not engaging enough. How could the QA testers, or devs themselves not come to this conclusion during development? Most of these AAA companies have their artist and CGI departments on lock, but are failing hard with whoever is coming up with gameplay loop, mechanics, etc.

 

And lastly, most indie devs are horrendous at pricing their games. They end up getting too greedy knowing Sony/publisher is taking a cut, and then games don't sell at all bc their price points are wack and by the time the games are on sale nobody cares anymore (or the discounts are still not enough). Sea of Stars, a 50+ hour quality game at $20 is a good price. Generic 3-5 hour shovelware horror game with bad graphics is not.

 

I'm not even going to get into VR or their choice for PS+ games month after month. Or these comic companies trying to spinoff these garbage C-list superheros that nobody cares about into mainstream games. Wolverine is probably going to bomb, he's not really a major character in anyone's eyes.

Edited February 23 by ChibsSoA

[dieselmanchild]

I finally just got a PS5, had to do my part to keep Sony afloat in these tough latter half times.
 

 

[StewartBros]

7 hours ago, Beyondthegrave07 said:

I am one of those who have held off on buying a PS5 for a few reasons.

 

Most games I've been interested in and purchased have been available for both PS4 and PS5 (Elden Ring, Persona 3 Reload, Resident Evil 8, Street Fighter 6, etc.) and choosing whether to upgrade to a new system for $500 and pay $70 for games or continue to pay $60 at a lower power... It doesn't feel necessary to upgrade. It's not that I can't afford one; it just feels like a waste if I'm going to continue to play PS4 games on it. My apartment isn't that big either so finding a place for it where it would be useful (it's too big to fit where the PS4 currently is) would be hard.

 

I wonder if others are like me just content with playing games on an older system and don't see a good reason to upgrade...

 

I'm pretty much in the same boat as you.  I can afford a PS5, but honestly don't yet see the need to buy one when I still have a sizable PS4 backlog to get through, and my PS4 is still more than up to the job.  There aren't too many PS5 games out yet that I would buy, and out of the ones that I would buy, a fair number are also on PS4, and are cheaper there.

 

I'm fine with slightly longer loading times on PS4, and can hold off on a PS5 until I clear enough of the PS4 backlog to justify the move.