Sony Reveals To Investors That The PS5 Is Being Sold At A Loss

Sony Reveals To Investors That The PS5 Is Being Sold At A Loss

Although it may already be obvious to those familiar with the gaming industry, the fact that the Sony PS5 is being sold at a loss is still a surprise given the unprecedented demand for the new-gen console – not to mention the ridiculous lengths people have gone to in order to get their hands on one.

Much like Microsoft with the Xbox Series X|S, Sony has now confirmed to investors, in a quarterly report, that PS5 sales aren’t up to scratch. At least as far as hardware goes. The same report, however, has reported a record US$10 billion profit for the company.

Software is obviously the reason for such a skyrocketing margin, with gaming sales and other entertainment revenue more than making up for the hardware fail. The report notes that Sony’s gaming division alone saw a 50% increase in income year-on-year – something that Sony expected when they set the “strategic price point” for the PS5 in order to essentially undercut Microsoft’s top-tier Xbox Series X. The PS Plus program alone added a massive 9 million more subscribers during the past year, adding to a base that now swells to more than 47 million users.

To put the hardware sales in perspective, the PS5 sold just 4.5 million units by the end of December. That’s the same amount that the PS4 sold during its entire launch quarter. This is despite pre-orders for the PS5 originally outweighing the PS4 upon launch, which initially indicated that the console would not be sold at a loss.

Of course, supply has something to do with it as well. The number of PS5 consoles on the market is nowhere near enough to meet the feverish demand that’s been buzzing since launch. The company plans to change that drastically this year, with a goal of selling 14.8 million PS5s next fiscal year, and a promise to investors to sell 7.6 million units by the end of the current one.

Planning to get your hands on a PS5 this year? Read our review of the console first, and this Xbox vs PS5 face-off as well.