Sony shares plummeted by some 8.4% on Thursday, their sharpest drop in almost two years, following publishing the firm's latest quarterly financial results. The proclamation that PS5 has reached its peak and the prediction that it expects growth to decline gradually from here seems to have spooked some shareholders.
Bloomberg marked the sharp drop off, noting that the company closed the day's business down 6.5%. Sony had to decrease its console sale forecast, slashing its prediction by four million units to an expected 21 million by the end of the financial year. It's a stark reminder that no entity is truly safe from the effects of the currently volatile market. For example, today, Microsoft confirmed it would bring four previously exclusive games to PS5 but refused to say which ones. These are strange and unprecedented times, indeed.
Are you surprised to see Sony's shares take a tumble? How low do you think they will go, or will they be buoyed by the promise of Xbox games coming to the platform? Make bold predictions in the comments section below.
[source bloomberg.com, via videogameschronicle.com]
Comments 33
Enough people will probably jump on this $8 dip to even it out somewhat tomorrow. I doubt there is any longterm stock effects of news from either platform this week.
Don't care....as long as I'm getting regular dosage of GRT games on the hardware.....
Plenty of great third party releases this year so I’m not worried.
After last night I don't think Sony will be too worried.
How low will MS stock drop after the podcast episode 🤣
@3Above Only a couple of dollars it looks like. MS are a lot less reliant on Xbox than Sony is with PlayStation.
If the PS5 Pro rumor is true, then I'm sure it'll spike back, whenever they announce it.
Stuff like this always happens after bad news. It'll bounce back.
It's the result of the dumb live service push. They are getting what they deserve.
With that said... plenty of good stuff coming anyways from 3rd parties.
@TrickyDicky99 🤣
@Suppressed A PS5 Pro will like be 1) very expensive or 2) heavily subsidized by Sony or 3) both. In the past, game margins were immense enough to justify hardware subsidies. But these days?
My prediction from what I‘ve seen in the last couple of days: Sony will skip the Pro and instead bring the PS6 much earlier, maybe 2026.
@Nem Share fluctuations are driven by measurable results - and there are no measurable results for their 'dumb live service push' yet. So erm... no, it's not that.
@Marquez share fluctuates driven by two things: fear and greed.
Rules the the entire stock market
@Suppressed extremely unlikely, PS4 Pro sales were 1 to 4 compared to the regular PS4. Moreover, PS5 Pro expected premium price is around $550. No way it is going to fly off shelves.
@Marquez You didn't get it.
The fact they have no single player games this year is cause they are so heavily invested on the live service thing. They have 10 in development or something like that. It's a ridiculous resource hog and it's responsible for this draught (and will likely be a disaster). Those games take a lot more development time.
Without those games to drive sales, projections are down.
@Nem You mean you didn’t explain it… at least not at first! Based on previous evidence the live service push is being made alongside more traditional first party development, Naughty Dog bei by a good example. So I still doubt the impact tbh.
@Marquez I am sure you can understand those are 10 other single player games they could have made.
The "side by side" is PR bs. It just means they didn't get every studio working on them. But, the output is clearly affected as we can see.
@Suppressed Sony already knows about release of PS5 Pro and they still expect gradual decline in sales.
So it's pretty clear that PS5 Pro wouldn't move a needle that much. It will be either brutally expensive (600$+), or heavily subsidized by Sony, or both.
And considering fact that only 14,3 million of 117+ million of PlayStation 4 was Pro consoles, everybody who thinks that Pro will bring reversal of fortune is setting themselves up for disappointment.
Seems like the big Europe price drop reported earlier on has now come to the UK:
PS5 (disc) - £369.99
PS5 Slim (disc) - £409.99/£419.99 (depends on the retailer)
It's a shame they don't release PS4 numbers any more. Wonder if it's hit the 120 million mark now, given that the PS2 sold another 3-4million units after Sony stopped reporting?
I find this slightly bizarre. 21 million in a fiscal year is more than the PS4 ever sold in a year. Additionally at the same time in it's life PS4's growth had also peaked (at 20m unit sales in FY16) and was in decline afterwards (19m, 17.8m, 13.5m & 5.7m in the years after)
Obviously it will depend what the decline looks like but so far this is neck and neck with PS4 and following it's trend that is GOOD news to me considering the stiffer competition from both Nintendo and Microsoft for the PS5 compared to PS4.
@sanderson72 Unlikely. The last official figure we had was 117.2 million in March 2022. But as they had only sold 1.3m units in the previous year, down from 5.5m the year before that, and this would likely drop drastically again, this has probably hardly changed. I'd guesstimate around 118 - 188.5 million. PS2 was in production for years afterwards PS4 isn't.
@Godot25 Yes it's reported that PS4 Pro 'only' sold 14.3 million units. But Sony had already sold around 50 million PS4s by the point it released. So PS4 Pro was in fact around 20% of all PS4s sold AFTER it was released which is far more encouraging.
That said I don't see PS5 Pro doing as well, I don't think there is as much of a need for it, and economic conditions are worse, but it will no doubt give sales a bump as fans double-dip and 'waiters' jump in, if it releases.
@themightyant No. PS4 Pro sold 14,3 million consoles using 2020 data (thanks to Insomniac leak). So it's 14,3 million of Pro vs. around 102,5 base PS4 consoles.
Even after Pro launched, console never outsold base PS4 outside of it's launch window.
Also, problem is that even if you are selling great number of PS5 Pro consoles, there is huge chance, that you are selling that console to the same people that bought base PS5 years ago. So you subsidized base PS5 when you sold the console in 2020 to the customer, and now you are subsidizing sale of PS5 Pro. So you lost on two hardware SKU's sold to the customer in span of 4 years.
How exactly does that make business sense?
Second option is to not subsidized PS5 Pro, but from what Totoki said recently, they can't even bring PS5 down in price because margins are razor thin. So you are looking at 600$ - 700$ console. And good luck selling that...
@Godot25 I didn't say Pro outsold base PS4. I said Pro sold around 20% of all PS4 sales AFTER Pro released, as they had already sold around 50m units to that point.
That's a good point about revenue and subsidising the cost of a second sale. But that doesn't factor in that the people buying a Pro model unit are likely more engaged, and likely to spend far more than the average player in other areas. You get to keep them in your ecosystem, loyal to the brand, and likely claw back that cost in other ways, that's part of the business reasoning.
Additionally you can make multiplatform players make yours the default box and gain all those game + DLC + MTX sales which otherwise might have been on Xbox. There's a lot of brand loyalty and prestige involved too. It's complex, there are many factors to consider over just subsidising the cost of the unit again. But if they didn't think it was worthwhile long term they simply wouldn't do it.
@themightyant I honestly think that idea of "Pro" consoles in this gen is stupid. I get why it was obvious during last gen. PS4 and Xbox One were ancient by the time they released with pathetic laptop-grade CPU's. Also there was surge of 4K TV, so Pro consoles "made sense."
But they don't make sense currently. It would be honestly way better just to cancel Pro consoles, and maybe shorten current gen to 6 years.
@Godot25 Great idea, cause VG budgets to balloon even more than they already are. Publishers need to get a handle on this ASAP, bringing back 6 year generations will make the problem worse.
@Fyz306903 Yes I mostly agree with you here that Pro units are probably not needed this gen, i'd prefer they didn't do them and tried to get the most out of the launch consoles.
And yet if they do make them and if it means guaranteeing 60fps in games for the next 4 years on console, or far less compromises, then I will probably be in line on Day 1. I see it most like a graphics card upgrade, an optional extra for those that want the best.
But I don't think a 6 year console cycle is a sensible idea, studios are only just getting to grips with the current units and tools built for them are still being built / optimised. 6 years would be too soon to do a whole jump imo.
@Fyz306903 ???
It really doesn't matter. Because whenever you will bring next generation we will have another 3-4 cross-gen period. Because that's how long game takes to develop.
Cutting budgets have nothing to do with shortening of generation. It has everything to do with bloat in AAA games (every game has to have skill trees, crafting, huge open world, 2 hours of cutscenes etc.) and excessive marketing spend.
So dumb. The business will continue to do well as long as the great games keep coming. And if there’s a price drop (which admittedly seems unlikely in the near term), they’ll continue to do well. Investors getting skittish about a fart in the wind is just silly.
@themightyant Unless I've missed a Sony announcement, the 500GB base PS4 is very much still in production.
@sanderson72 TBH I had assumed they had quietly phased it out without fanfare, as they said they would discontinue it in 2022.
I did some more digging and didn't come up with a conclusive answer. But according to a Jan 2022 Bloomberg article PS4 production was continued in 2022 due to PS5 shortages (they ordered 1 million extra PS4 units), I couldn't find anything more conclusive than that. My suspicion is they have just quietly phased it out, but it's only that.
Hold!! It'll keep dropping and then we buy some shares! This is not financial advice, btw.
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