Sony game sector sees 184% increase in operating profit thanks to improved PS5 profitability and increased sales of third-party games like Black Myth: Wukong 

The Sony Group recently published their financial results for the second quarter of the fiscal year. During the 3-month period from July until September 2024, Sony’s Game and Network Services sector saw a significant increase in sales and operating profit thanks in part to increased sales of third-party games and PlayStation Plus services. 

In Quarter 2, net sales in Sony’s Game and Network Services sector were up 12% YoY to 117.4 billion yen. Operating profit was up a staggering 184% to 89.9 billion yen (Adjusted OIBDA: 85.9 billion yen).  

One of the reasons cited for these profits was an increase in sales of non-first party games on PlayStation platforms. In Sony’s presentation, they mentioned that, “As for third-party software, sales significantly grew due to contributions from solid franchise titles as well as hit new IP, including a new sports title and an action RPG title from China.” It is likely that the Chinese action RPG title that Sony is referring to is Black Myth: Wukong.  

Increased sales from network services, especially PlayStation Plus, also contributed to Sony’s soaring game-related profits. In Quarter 2, monthly active PlayStation Plus users jumped by 8% to 116 million. Back in mid 2022, Sony revised its PlayStation Plus tiers into the Essential, Extra and Premium categories. It seems this move is now yielding profitable results for Sony, as the company reports that the average revenue per PS Plus subscriber increased as a result of users switching to more expensive subscription plans, as well as price revisions. 

In terms of hardware, Sony reported that profitability had improved (in September, Sony raised PS5 prices in Japan). However, at the same time, the number of hardware units sold declined compared to the previous year. Although the PS5 is Sony’s most profitable console to date, one reason why hardware sales were down this quarter is likely due to players waiting for the November 7 release of the PS5 Pro.  

As a result of these quarter 2 profits, Sony have revised their full-year forecast upwards for the Game and Network Services sector. They have increased projected game sales up 4% from the previous August forecast to 4 trillion 490 billion yen. Likewise, they expect operating income to increase by 11% to 355 billion yen.