Sony plans to capture over 50% of the console market with the PS5

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PlayStation has unveiled a strategy to increase its share of the console gaming market. The company is confident that PS5 sales will surpass the records of the successful PS4, thanks to user loyalty to the PlayStation brand, the increase in the number of female gamers, and an expanded presence in markets outside of North America, Europe, and Japan. Given these factors, PlayStation aims to strengthen its position and attract new audiences, which, in turn, may lead to an even greater increase in interest in console gaming.

At the IR Day event, Jim Ryan, head of PlayStation, presented key areas of the company's growth. He discussed the launch of exclusive games on other platforms, the expansion of the PlayStation Studios portfolio, as well as the development of cloud gaming services and virtual reality. These initiatives demonstrate the company's strategic approach to strengthening its market position and providing users with new gaming experiences.

In 2020, PlayStation demonstrated significant growth, achieving record shipments of the new PS5 console, which reached 7.8 million units in its first year of launch. Sony expressed confidence in capturing over 50% of the console market share, which, according to IDG, is expected to reach $88 billion by 2025. Thus, Sony aims to strengthen its position in the video game industry and strives to meet the growing demand for next-generation consoles.

The brand emphasized that the owners The PS4 and PS5 consoles are older than the original PS1 users. This demonstrates that the company's audience continues to actively use consoles across multiple generations. This trend confirms the enduring interest in Sony's gaming devices and their evolution, allowing the brand to maintain a strong position in the video game market.

It's striking that 41% of PlayStation 5 owners are women, compared to just 18% of PlayStation 1 owners. Sony also reports that in 2000, only 1% of its revenue came from users outside the US, Japan, and North America. By 2010, that figure had increased to 5%, and it's now reached 10%. PlayStation views regions such as South America, Africa, India, China, Eastern Europe, and Russia as key areas for further growth and audience expansion. This growth is a testament to the global popularity of PlayStation and the changing demographics of its users.

On a separate slide of the presentation, the company said that the standard version of the PS5 will most likely The console will begin to turn a profit in June. During this period, the cost price of the console is expected to be lower than its wholesale price. This is an important milestone for the company, as lower production costs could positively impact financial performance and ensure stable demand for the console.

In fiscal 2013, 48% of the PlayStation division's revenue came from console sales, while 52% came from software, services, and peripherals. However, in the most recent fiscal year, the share of revenue from console sales decreased to 20%. At the same time, 80% of revenue came from software, services, and additional products. This marks a significant shift in PlayStation's business model, with a greater emphasis on digital solutions and a broader range of services, reflecting current trends in the video game market.

Sony is confident that the next fiscal year will be the most successful for the PlayStation 5. The company predicts that PS5 sales will surpass the record set by the PS4, which amounted to more than 14.8 million units in the first two years after its release. In fiscal year 2022, Sony aims to achieve a new record for sales of the latest-generation console. Currently, the record belongs to the PlayStation 1, released in 1998, which sold 22.6 million consoles. Increased production and improved availability of the PS5 are expected to help the company achieve these ambitious goals.

In terms of engagement, which is becoming a key metric for console manufacturers, the PS5 is off to a strong start. According to Sony, the number of active PS5 users in March 2021 was 8.6 million, exceeding the 7.1 million PS4 users during the same period. The increase in active PS5 users is due to the ability to create multiple unique accounts on a single device, allowing more players to enjoy games on the console. This makes the PS5 not only more accessible, but also attractive to users seeking a shared gaming experience.

Expenses on PS5 titles increased by 15% between November 2020 and March 2021 compared to the same period for PS4 in 2013. Despite a 15% decline in game sales, there was a significant increase in add-on sales, which reached 231%. One of the main factors distinguishing the PS5 launch from the PS4 is the availability of a larger number of titles available through the PlayStation Plus and PlayStation Now subscription services. These changes highlight the evolution of the video game market and user adaptation to new conditions, as well as the growing interest in subscription models.

Over the past 18 months, there has been a significant increase in video game sales and publisher and developer engagement. This is due to an influx of new customers who began using console platforms for the first time, as well as the return of lapsed players. Experts note that with the end of the COVID-19 pandemic and the reopening of borders, a decrease in the time users spend playing games is expected. However, precise estimates of the percentage reduction in this time remain uncertain. It is important to monitor market changes and adapt to new conditions to maintain audience interest and support the growth of the video game industry.

Sony presented a slide showing the decline in weekly active users following the introduction of the COVID-19 vaccine. In North America, this figure decreased by 3.3%, and in Germany by 5.3%. These data highlight the impact of the pandemic and vaccination on user activity, which may be an important aspect for analyzing consumer behavior and company strategy.

The presentation was not limited to the PS5; Sony also detailed its plans for supporting and growing the PS4.

The company still expects the PS4 console to generate 70% of PlayStation Store revenue in the next financial year, down significantly from 95% in 2020. Free-to-play games are expected to account for the bulk of this revenue. In 2016, only 5% of PlayStation Store revenue came from this category, while by 2020 this figure had grown to over 25%. This is due to the successful launch of games such as Fortnite, Call of Duty: Warzone, Apex Legends, Rocket League, and Genshin Impact on the console. The increase in the share of free-to-play games highlights changing player preferences and evolving business models in the video game industry.

Sony reported that 48 million users currently subscribe to PlayStation Plus, with the majority of them being PS4 owners. Among subscribers, 40% choose a premium subscription for access to online multiplayer, 30% do so for the monthly free games, 18% use the subscription to participate in exclusive sales, and 12% choose the service for cloud storage of saves. These data highlight the popularity of PlayStation Plus and the wide range of benefits it offers players.