Sony announced in their Q2 earnings call some good and bad news: The PlayStation 5 sold 25 million units worldwide, yet the PlayStation Plus lost 2 million subscribers. The PS5 sales increase isn’t shocking, as more units are making it out to the public, who snap them up quickly.
PS5 Sales Increase, Making The Game & Network Services Segment Profitable
With the PS5 sales increase it made the Game & Network Services Segment of Sony profitable. One reason, as stated in the Q2 earnings documentation, was the “impact of foreign exchange rates.” With the United States Dollar stronger than other currencies around the world, including the Japanese Yen (which Sony calculates his earnings), each console sales nets Sony more money. It also helps the biggest market for the console is in the United States.
Another reason for the console sales bringing in more money is the price increase in various countries earlier this year. Although this move gained the ire of PlayStation fans the company didn’t back down. They rightfully used the reason of increasing costs in production and shipping. And these costs are harming Sony’s bottom line per the earnings documentation.
PS Plus Loses Subscribers
While the PS5 sales increase, PlayStation Plus loses 2 million subscribers. And this could signal trouble for the company. Especially if the remaining subscribers do not elect the higher, more expensive PS Plus tiers.
As of the end of Q2, PS Plus has 45.4 million subscribers. It was 47.3 million at the end of Q1. So why did the service lose 2 million subscribers? Well, Sony’s CFO Hiroki Totoki blames third-party game developers, declining PS4 sales, and “more people going outdoors.”
Regarding third-party game developers, yes, many have not released games for the PlayStation consoles due to delays and/or long development times. However, 2023 will see major releases from various third-party developers so that should help the company. As for the PS4, though, Sony should know more and more people will not purchase the console since the PS5 has more stock. However, most, if not all, of those purchasers should continue their PS Plus subscription if they had one before. Lastly, let’s look at the last reason: “More people going outdoors.”
I don’t buy that reason for the declining PS Plus subscribers. Yes, more people around the world are traveling more due to the Pandemic “ending in a sense” (in most countries), but gamers are still buying games. I think the reason for the declining subscribers is the lack of interesting free PS Plus games. I see comments on social media every month when PlayStation announces the next batch of games, and many aren’t happy with the selection. Because of that, I could see some users cancel their subscription and use the monthly cost on another subscription, or even buying a video game for their console.