Sony’s Playstation 5 is about to break even soon, with the Standard Edition potentially starting off its profits this June.
The Playstation 5 hardware always sold at a loss, but it seems that Sony should be happy. According to Sony’s report, the Standard Edition will be making them money. This comes only a little over seven months after the PS5 released in November.
PS5 Standard Edition leads the way
Speaking to an investor relations event this week, Sony Interactive Entertainment (SIE) President and CEO Jim Ryan noted that cost of goods is about to meet average wholesale price in June. This will make everything profitable from that point forward.
“Another area that we focused on is our console economics,” said Ryan. “I’m pleased to say that the PS5 standard edition will break even from next month’s production. And from then on, we project that it will gradually become increasingly profitable.”
Sony launched the PS5 in November 2020, matching the timeline of the Xbox Series X/S. The PS5 priced at $500 for the standard edition, while the digital edition came at $400. The only difference for either was the former having a disc drive.
Ryan also noted in the same investor presentation that the PS5 SE represents a majority of their sales.
Digital Edition owners spent more than Standard Edition owners
The Playstation 5 is an exhilarating success, almost neck in neck with Microsoft’s own console. The PS5 has quite the lead early on, almost doubling the total sales of the Series X.
— PlayStation (@PlayStation) May 27, 2021
So far, people are still more than happy to shell out a little extra for the Standard Edition. Even then, SIE President Jim Ryan notes that the ratios may change in the future.
“We do not see that proportion changing greatly in FY21 [the current business year ending in March 2022] but we anticipate that as time passes, as we move further into the cycle of PS5, that there will be some slight increase in the ratio of the digital edition, but not significant,” he notes.
Ryan also notes further that the value of console sales is declining in Playstation’s overall business model. Software, services, and even peripherals are helping Sony make bank instead. Consoles only make up 20% of the company’s revenue in FY20.
Sony also notes that Digital Edition owners spent 8% more in digital games and DLC. These numbers were slightly higher than Sony expected and, according to Ryan, are “a very encouraging data point for us in my opinion.”
Even if the Sony Playstation 5 is sold at a loss, the console is doing well. Some presentation documents also show that Uncharted 4 will come to PC soon.
Featured image courtesy of Playstation/Youtube Screenshot