Do Sony’s Financials Show Trouble for PlayStation 5?

Sony released its Q3 2023 financials today, and parts of it paint a worrying picture. In its release, it dropped its fiscal year PS5 sales target from 25 million to 21 million. I’ve seen some doom and gloom on Twitter and Reddit today, so let me be crystal clear here. While this is a steep drop, the PS5 still achieved record-high quarterly sales. Not only that, but the current sales are above 2022’s numbers. This isn’t a death knell for the PlayStation brand — anyone telling you otherwise is wrong. The next bit, however, is concerning.

No New First-Party Games Until 2025?

Later in the report (page 7 of the linked document), it dropped a shocking revelation about its current 1st-party offerings on the PlayStation 5. No new entries in their existing “biggest franchises” will be released in the next fiscal year. So that means from now until March 31, 2025. Though Sony specifically mentions God of War and Spider-Man, it’s safe to say this expands outward to titles like Bloodborne and Ghost of Tsushima. Sony is banking on third-party releases to drive PS5 sales and bridge the gap it left in software sales.

With Final Fantasy VII: Rebirth dropping later this month and Stellar Blade coming in April, that’s a fair stance. But will it be enough? Sony has acquired known talent in Western circles and recently partnered with Korean game devs Shift-Up. But its overall investment in Japanese developers has waned. This was most evident when it shuttered Sony Computer Entertainment Japan. It’s hard to tell what is driving this decision. But PlayStation fans and the wider internet have noticed the lack of must-play exclusives on the system. Fun fact: the Sega Dreamcast had more exclusives in its first year than the PS5 has had up to now.

Dragoon Battle — I guess a Legend of Dragoon remake is still a pipe dream.

Let’s take a look at those sales forecasts next. A drop of four million is nothing to sneeze at. But it’s difficult to determine whether Sony just had its sights too high or if consumer interest has faltered. Further complicating matters is the lack of exclusives. There has only been a handful, not counting any timed exclusives or games released on PC. Everything else has either gone to PC or launched on PS4/Xbox. If it truly is consumer apathy, this is likely where the issue lies. There’s no reason to migrate to the PlayStation 5 from PS4 or PC unless you want to play those games early or in the best possible way.

The “Latter Half” of the Console Life Cycle

All that leads to the final area I want to touch on. Sony says the PS5 is “entering the latter half of the console cycle.” This is surprising to me. The first few years of this console’s life were marred by manufacturing hurdles and rampant scalping. I got lucky in finding mine in 2020, thanks to the efforts of my wife, but most of my friends couldn’t find one for MSRP. And major games are still coming out on PS4, even this far into the PS5’s life, like Persona 3 Reload. The total games industry is in a “calm before the storm” right now. With record-breaking layoffs across the world’s studios and inflated budgets shrinking profit margins, I fully expect a shakeup in the coming years. How it will affect Sony is anyone’s guess, but it must do something. Investing back in Japanese games would be a good start.

But what do you think? Is the PS5 losing steam, or is this just a typical drop in sales? What are your thoughts on how it should remedy their apparent lack of big exclusives? Be sure to let us know below and on social media!

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