Sony Interactive Entertainment does not plan to release “new games from existing franchises” in the next fiscal year ending 31 March 2025.
This information was revealed by the president, COO, and CFO of Sony Group Corporation, Hiroki Totoki, through the Q3 FY 2023 financial report. If you are interested in the state of the video game industry, you can check out our other articles here.
Sony Not Releasing New Games from Major Franchises Before 31 March 2025
Sony Interactive Entertainment does not plan to release “new games from existing franchises” in fiscal year 2024 (1 April 2024 – 31 March 2025).
Regarding first-party software, we aim to continue to focus on producing high-quality works and developing live service games. However, although major projects are currently in development, we do not plan to release major existing franchise titles in the next fiscal year such as God of War Ragnarök and Marvel’s Spider-Man 2.
Although acquisition-related expenses will decrease in the next fiscal year, we expect profit from first-party software to decrease slightly from this fiscal year due to the impact of lower sales. Therefore, operating income for the next fiscal year is currently expected to increase slightly from this fiscal year. However, while this is our baseline forecast, we are reviewing measures to further improve profitability before the announcement of the annual forecast results this May.
Hiroki Totoki, President, COO, and CFO of Sony Group Corporation
It’s worth noting that while “existing major franchise titles” include IPs like God of War and Marvel’s Spider-Man, it doesn’t include recent IPs like Concord or smaller franchise titles like Until Dawn.
Totoki also discussed Sony Group Corporation’s future outlook for PS5 sales during fiscal year 2024:
Regarding PS5 hardware, which will enter its fifth year since launch, partly due to entering the latter half of the console cycle, we aim to optimise sales with greater emphasis on balance with profit, so we anticipate a gradual decline in unit sales from the next fiscal year onwards. We expect third-party software sales to continue to gradually increase due to the expansion of the PS5 install base and the high level of user engagement.
In network services, we expect the number of subscribers to be on par with this fiscal year or slightly less due to the impact of the price revisions we implemented in this fiscal year, but we expect sales to expand gradually due to the shift to attractive premium services.
Hiroki Totoki, President, COO, and CFO of Sony Group Corporation
Hiroki Totoki Discusses Sony Interactive Entertainment’s Business Situation
On the other hand, Totoki discussed his role as head of Sony Interactive Entertainment and his visit to PlayStation’s in-house studio:
It’s been about four months [since I became chairman of Sony Interactive Entertainment] and I’m trying to show leadership and trying to have as many meetings as possible with the management team. I also visit the studios and everyone is working very hard to fulfil their responsibilities to try to optimise the business, and I understand that.It’s been about four months [since I became chairman of Sony Interactive Entertainment] and I’m trying to show leadership and trying to have as many meetings as possible with the management team. I also visit the studios and everyone is working very hard to fulfil their responsibilities to try to optimise the business, and I understand that.
But overall growth and sustainable profitability or margin improvement-how does that realise these goals? I don’t think people understand that deeply. I think it’s an organisational issue.
So, as far as I’m concerned, I try to understand what’s happening in the company, in the industry, and also from the analysts’ point of view, and try to explain it transparently so that people can recognise and pay attention to these issues so that we can have an aligned approach going forward. That’s a very common comment since I became chairman. There are some concrete points that I won’t go into today.
Now, about visiting the studio and I have had meetings with the leaders there – the studio. The people who work at the studio are very highly motivated. They are very motivated. They are very nice people. Also, they are very creative people. They have great creative minds. They also have knowledge about live broadcasting.
However, having said that, in terms of the business itself, I think there is still room for improvement. That has to do with how to spend money or about the development schedule or how to fulfil one’s accountability towards development, and so on. Those are my candid impressions. So I will continue to have dialogue with the community so that we can find the right way to proceed.
Hiroki Totoki, President, COO, and CFO of Sony Group Corporation
Hiroki Totoki wants Sony to increase PlayStation profit margins, including an aggressive focus on PCs
Mr Totoki was asked why PlayStation saw an increase in gross revenue but no increase in profit and whether there were any initiatives planned to increase profits:
For gaming this year, profit margin, especially operating margin is not a good situation. Yes, partly because we are currently in a transition period where PS5 as a hardware unit is evolving as a process.
But what we need to manage is that the PS4 and previous general consoles – unlike the PS4 or previous generations – if you look at the console cycle, cost reduction within that cycle is very difficult. That’s a big challenge.
Because if you think about a PlayStation console device, it’s not like a computer [PC] with high specifications. It’s affordable, while with a very safe and reliable environment with a really great experience. Those are the things that are great about PlayStation.Because if you think about a PlayStation console device, it’s not like a computer [PC] with high specifications. It’s affordable, while with a very safe and reliable environment with a really great experience. Those are the things that are great about PlayStation.
But compared to the past, the cost to build that experience, the memory, the chip set, the price of all those components went up as a matter of fact.
How can we deliver our product plans to be affordable so that without relying on heavy discounting to sell them reasonably to continue our commercial journey sustainably. I personally think this is very important. There’s an opportunity in that and that’s how I see it.
Another potential driver is the creation of first-party titles because in the past, as you all know, we wanted to popularise consoles. Titles are a thing and first-party titles might aim to popularise hardware or consoles, right? It’s true, isn’t it? But there’s a synergy to it.
So, if we have strong first-party content, not only with our consoles, but also other platforms such as computers [PCs]. First party can be developed with multi-platforms and that can help increase operating profit. So, that is one of the other things that we want to track by running.So, if we have strong first-party content, not only with our consoles, but also other platforms such as computers [PCs]. First party can be developed with multi-platforms and that can help increase operating profit. So, that is one of the other things that we want to track by running.
I personally think that there are many opportunities out there to improve margins. So I want to do my best to improve our margin performance.
Hiroki Totoki, President, COO, and CFO of Sony Group Corporation
