Is the PS5 Sold at a Loss?

The PS5 is no longer sold at a loss, as confirmed by Sony’s chief financial officer, Hiroki Totoki, with the company initially selling the console below its manufacturing cost but now generating profits. The PS5 ecosystem has seen significant growth, with sales increasing by over $500 million between Q3 2021 and Q3 2022, reaching $4.93 billion, and the console selling over 40 million units as of July 2023.

FAQs About PS5 Sales and Profitability

General Questions

1. Is Sony still losing money on PS5?: No, Sony is no longer losing money on the PS5, as the console’s production costs have been optimized to ensure profitability.
2. Why are PS5 sales low?: PS5 sales have been impacted by the semiconductor chip shortage and supply chain issues prompted by the global coronavirus pandemic, making it difficult for consumers to obtain the console at its MSRP.
3. Are game consoles sold at a loss?: Yes, console manufacturers often sell consoles at a loss, with the exception of Nintendo, and recoup their losses through software sales and subscriptions.

PS5 Sales Performance

4. How well is the PS5 selling?: The PS5 has sold over 40 million units as of July 2023, making it a massive success for Sony, although slightly behind the sales pace of the PS4.
5. Is PS5 worth investing in?: The decision to invest in a PS5 depends on individual preferences, but the console’s limited new generation games and the compatibility of PS4 games on the PS5 might make it less appealing to some gamers.
6. Who is winning PS5 or Xbox sales?: The PS5 has a 62.7% market share, with 35.94 million units sold, compared to the Xbox Series X|S with 21.35 million units sold and a 37.3% market share.

Console Sales Strategies

7. Which consoles sell at a loss?: Both Xbox and PlayStation consoles have been sold at a loss in the past, with the goal of asserting market share and creating a development ecosystem for games.
8. Which consoles were loss leaders?: Consoles like the Xbox 360, PlayStation 3, Xbox One, PlayStation 4, and Xbox Series X/S and PlayStation 5 have been sold as loss leaders to drive market share and game development.
9. Is Xbox losing money?: Yes, Microsoft loses between $100 and $200 on each Xbox console sold, depending on the model, with the Xbox Series X costing around $699 to manufacture and selling for $499.

Future Prospects and Comparison

10. Is it worth it to get a PS5 in 2023?: If gamers want to play the latest games, upgrading to the PS5 might be necessary, as games like Hogwarts Legacy are released first on the PS5 and later on the PS4.
11. Is the PS5 a success?: Yes, the PS5 has sold 40 million units, tracking slightly behind the PS4, and Sony has set a target of selling 25 million PS5s in the current financial year.
12. Why no one is buying PS5?: The high price point of the PS5, increased by $100 in August 2022 due to global economic challenges, might be a deterrent for some potential buyers.

Business and Sales Data

13. Is PS5 making a profit?: Yes, Sony reported a record 1.21 trillion yen in operating profit, with 19.1 million PS5 consoles sold in the financial year, beating their forecast of 18 million.
14. What is Sony doing about PS5 scalpers?: Sony is considering stricter requirements to purchase the console and has had success in preventing scalping with PS VR2 pre-orders by requiring buyers to prove they are legitimate customers.
15. Is PS5 stopping production?: The current PS5 model will reportedly be replaced by a smaller model with a detachable disc drive, with production of the current model expected to end by the end of 2023.