PS5 Profit Margins Are Shrinking as Manufacturing Costs Increase Which Could Lead to Lesser Performance Gains in Future Models

[Peter_Brosdahl]

PS5 profit margins are shrinking according to a new report from Sony's Chief Operating Officer (COO) who lays blame on rising costs of parts. Hiroki Totoki, President, CFO, and COO of Sony Group Corporation has said the company has reduced its current fiscal year target of selling 25 million units down to 21 million units. Totoki was quoted as saying that profits for the console are becoming difficult to grow as its lifecycle continues since unlike previous generations, its parts are increasing in price.

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[Brian_B]

So, this doesn't really make sense.

Ok - reduced profit margins because of risining costs. Ok, they have not announced a price increase, so I can get that.

But. Now they reduce the estimated sales count, citing this as the reason So does that signal that the price hike is coming?

 

[Denpepe]

Ok, they have not announced a price increase

not in the US, price has been increased mostly everywhere else in august of 2022

 

[Ditchinit]

So, price aside, how does the rest of this news reconcile with their previous marketing fluff piece where they announced the next gen PlayStation will "BE THE MOST POWERFUL CONSOLE EVAH !!1! " ** ?



(** I may be paraphrasing.)

 

[Marees]

So, price aside, how does the rest of this news reconcile with their previous marketing fluff piece where they announced the next gen PlayStation will "BE THE MOST POWERFUL CONSOLE EVAH !!1! " ** ?



(** I may be paraphrasing.)

To recoup revenues Sony will consider selling more titles on PC (Exclusives only in the beginning of a console cycle until saturation of consoles is reached)

 

[Peter_Brosdahl]

So, price aside, how does the rest of this news reconcile with their previous marketing fluff piece where they announced the next gen PlayStation will "BE THE MOST POWERFUL CONSOLE EVAH !!1! " ** ?



(** I may be paraphrasing.)

The hype train has left the station. Basically between hype, moving the goalposts, and other tactics, they're doing whatever it takes to not scare the investors.

 

[Grimlakin]

The hype train has left the station. Basically between hype, moving the goalposts, and other tactics, they're doing whatever it takes to not scare the investors.

That's normal. Honestly we'll know things are REALLY bad if they start shopping divisions out.