The Strategist

Sony sells 4.5M PlayStation 5s in 2020

02/04/2021 - 03:13

Japanese Sony published its report for the fourth quarter of 2020, in which it reported record quarterly earnings for its gaming division in the company's history. Overall, revenue for the fourth quarter of 2020 rose 9.5% to $25.7 billion and operating profit rose 62% to $3.5 billion. The company increased its annual revenue forecast by 6.5% to $83.8 billion and profit by 86% to $10.3 billion, which would be a record for Sony.

The company's gaming division performed best, with PlayStation 5 launches, strong game sales and PlayStation Plus subscriptions boosting revenue in the division by 40% year-on-year to $8.4 billion. Operating profit rose 50% to $763.3 million, an all-time high for the PlayStation brand.

Sony was able to sell 4.5 million PlayStation 5 consoles in the fourth quarter of 2020, despite a persistent shortage in shops. However, the company notes that because the console sells for less than its production cost, profits do not fully cover the cost of producing the PS5.

The PS5 result is similar to how the PlayStation 4 sold at launch (over 106 million PS4s have been sold so far). Demand for the PS4 dropped by 77% last quarter, and the company delivered around 1.4 million consoles in total to shops. Sony sold fewer PS4s in the fourth quarter of 2020 than in the third.

Revenue for the company's film division fell 17%, to $1.8 billion, due to a lack of major releases in the second half of 2020, but profits rose 316%, to $212 million, thanks to growth in digital sales and TV rights during the coronavirus pandemic. The electronics division's profit rose 32% to $1 billion, driven by increased sales of televisions and digital cameras.