Earlier this month, Sony announced that they had sold a total of 10 million PlayStation 4s. This is double the number of XBox Ones sold the last time Microsoft announced their results in May. The PS4 is also beating out the Wii U’s 6.68 million units sold despite the Wii U (Nov. 8, 2012) releasing significantly earlier than the PS4 (Nov. 15, 2013). It is obvious that out of the gate Sony has had the advantage, but I wanted to see how big the advantage was, so I dug a little deeper into Sony’s financial data.
The first thing that I found was that Sony has been making a profit on each PS4 unit sold. While the margin is less than $20, this is a big change from when they were selling the PS3 at a loss. Better still, PS4s are getting cheaper to make according to the company’s Q1 earnings call to shareholders. By comparison, an XBox One costs $471 to produce with only $75 of that cost coming from the Kinect sensor. This means that Microsoft is barely breaking even on their machine after the price cuts and will be losing money on the new bundles they announced at Gamescom.
The other stat that less impressive was software sales. Sony announced in their Q1 earnings call that they had sold 30 million games in both physical and digital form. Compare this to the average of three games sold per console for the XBox One and Sony is staying even with the competition. Still, with more systems out there, that means significantly larger software sales for Sony. The fact that more than half of PS4 owners have subscribed to PlayStation+ and have had free access to games such as Don’t Starve and Mercenary Kings has likely helped this.
Overall, the early months of the console war have been very good for Sony. Between the months of April and June Sony’s gaming division brought in $2.55 billion for a profit of $43 million. This was so high above expectations that the company has revised the division’s expected income for the year upwards by $50 million. This is impressive because another note mentioned in Sony’s earnings call is that they still see the PS4 as in the investment phase, so they intend to continue pouring money into support for the machine, whether that be in the form of games, software updates, new functionality, or applications.
Microsoft certainly has a lot of catching up to do, but with the experience of two consoles behind them and exclusives like Fable Legends and Halo 5 on the horizon, I’m sure they will be able to make a dent in Sony’s lead.