Sony Is Past its PlayStation 5 Peak

The PlayStation 5 may be on its last life.

Japanese entertainment giant Sony said Tuesday that sales of its iconic console rose over the past fiscal year, but it lowered its guidance for how many of the devices it expects to sell over the next year. As this chapter in the console wars winds down, the next bout could be particularly brutal.

It’s All About the Consoles

The PS5 was released way back in the mists of 2020 alongside Microsoft’s Xbox Series X, but it wasn’t until last year that the console was something you could easily buy. A semiconductor chip shortage and broader pandemic-era supply-chain knots meant the early days of buying a PS5 involved setting yourself alerts and pouncing when one came through. Despite those snarls, the PS5 managed to outsell the Series X, gaming analyst Rhys Elliott from analysis firm MIDiA told The Daily Upside.

Now with demand for the console winding down, Sony and Microsoft are both gearing up for the next stage in the console wars, but this time it’s against a backdrop of widespread job cuts and dried-up funding in the gaming industry. They’re taking vastly disparate approaches:

• Elliott said Microsoft has repositioned itself in the past five years as a services platform rather than a console maker. “It has poured money into its cloud, PC, and services operations alongside its console offering,” he said. Microsoft is also making major moves into phone gaming, announcing this week that it’s launching its own mobile app store to compete with Apple and Google.
• Sony, on the other hand, is sticking to console gaming, Elliott said, adding that exclusive first-party games (i.e., games you can only play on a PlayStation) have a big part to play in its strategy moving forward.  “PlayStation’s console and its […] exclusive first-party content remains its bread and butter,” said Elliott.   

If It’s Any Consolation: Historically, Sony has maintained an edge over Xbox by producing high-quality first-party games. In its Tuesday results, Sony said it didn’t have any big franchise first-party games in its near future, but Elliott said that doesn’t mean Sony is abandoning that strategy. “There is huge first-party content cooking at PlayStation, so it will retain its unique value proposition of high-profile prestige franchise games,” he said, adding: “It will just take time, as making new AAA [high-end] games can take up to seven years at this point.”