Sony reduced the Playstation 5 to increase profits

Autumn is the hottest period for game and console producers. Sony will soon start selling a smaller version of the Playstation 5. This is expected to help the company sell as many as 25 million units this year. Microsoft it will probably not present the new Xbox until next year, and in the meantime, it has completed the acquisition Activision Blizzard.

The new console debuts in November

Sony will start sales in the US in November new version of the Playstation 5 console. It will be 30 percent. smaller than the previous model (1/4 lighter). It will enable modular connection of an optical drive and will be equipped with a 1TB SSD drive. The new model should be available for global (and Polish) distribution before Christmas.

The new PlayStation 5 model will completely replace the version currently available on the market. This will happen after emptying the warehouses of the previous model. The premiere of the new console during the pre-Christmas rush is a move intended to increase the company's revenues. The console is smaller and lighter, which will reduce transport and logistics costs, and it is possible that the console will also be cheaper to produce.

Sony plans to improve its results

The new console will cost $449 in the US, which is $50 more than the discontinued PS5 Digital version. The modular design means that an optical drive (costing an additional $80) can be purchased and connected to the console at any time. Therefore, the version with a disk becomes more expensive by $30 (from $499 to $529). In Poland, the official prices of the new console will be around PLN 2100 for the basic model and around PLN 2500 with the optical drive. However, it can be expected that prices will be higher before the holidays due to high demand and limited supply on our market.

The new model is intended to help Sony achieve its ambitious plan to sell as many as 25 million console units in the fiscal year ending in March 2024. A year earlier, sales amounted to 19,1 million units. In the period from April to June 2023, console sales amounted to 3,3 million units, which means that in order to achieve this intended success, sales should double in the following quarters. Sony will publish its results for the quarter ended in September on November 9.

The company's revenues will also be increased by the recent price increase of Playstation 5 Plus. In Poland, the annual price increase was from PLN 55 to PLN 150, depending on the variant. It is worth noting, however, that in the case of Sony, the share of digital subscription holders among gamers is smaller than in the case of Microsoft. The share of sales of Xbox consoles without an optical drive is over 50 percent, while in the case of Sony it has so far been less than 20 percent. And owners of consoles without drives are more likely to use games in the subscription model. It therefore seems that the revenues of Sony Game & Network Services should increase in the coming quarters. For the full fiscal year ending March 2024, the market expects Sony to achieve revenue growth of 5,3% and gross margin to increase to 36,14%, surpassing 27,22%. a year before.

Sony's main competitor on the console market - Microsoft - will not present new versions of Xbox this year. According to various reports, the company plans to premiere new models only next year. Currently, Microsoft is focused on finalizing the purchase of game developer Activision Blizzard. The value of this transaction was USD 69 billion.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.