PS5 add-on content spending up 176% over PS4, plans to cut costs through outsourcing

In less than four years of its life cycle, PlayStation 5 generated $106 billion in revenue. That is almost on par with what PS4 made over the seven years of its console generation — $107 billion.

PS5 is already the most profitable console in the history of SIE, with $10 billion in operating profit to date. It is followed by PS4 ($9 billion), PS1 ($3 billion), and PS2 ($2 billion), while PS3 posted an operating loss of $4 billion.

As of April 30, 2024, Sony had 97 million monthly active consoles, and the audience is equally split between PS4 and PS5. However, PS5 users are more engaged — 2.4 billion gameplay hours vs. 1.4 billion for PS4 users.

Multiplatform strategy and cost optimization

During the Q&A session, Hermen Hulst confirmed that its live service titles will launch “simultaneously, day and date on PlayStation 5 and PC.” But the company will use a “more strategic approach” with its single-player platform exclusives, meaning PC ports will continue to arrive with a delay.

“We’re finding new audiences that are potentially going to be very interested in playing sequels on the PlayStation platform,” Hulst said. “We have high hopes that we are actually able to bring new players into PlayStation at large, but into PlayStation platforms specifically.”

Sony hopes that delayed PC ports of platform exclusives will help the company expand its console audience by increasing the reach of its games and motivating some users to purchase a PlayStation device. “Rather than cannibalization, I think this is an opportunity for growth,” Hideaki Nishino added.

In FY23, Sony expected its annual PC revenue to reach $450 million, up 80% year-over-year. However, it is unclear whether the company achieved this goal.

PlayStation is also committed to optimizing the cost side of its business and making its investments in game development more sustainable. According to Hulst, the company is looking at outsourcing and co-development options to work with teams located in regions with lower resource costs.

This makes sense from a business perspective given exorbitant budgets of AAA games. For example, The Last of Us Part II cost $220 million to produce, while Marvel’s Spider-Man 2 had a total budget of $315 million (2x compared to Miles Morales).