PS4 just reached its final life cycle

For this entire console generation, the PlayStation 4 has been the dominant system. Sony has had an excellent run with the PlayStation 4, thanks it large part to the vast number of exclusives it's secured for the platform. Still, we can't expect PS4 sales to keep growing year-over-year forever, and Sony Interactive Entertainment CEO John Kodera has told investors that the console is entering the final phase of its life cycle.

Before you take that to mean there's a new PlayStation console on the horizon, Kodera's statement, which was shared by Wall Street Journal reporter Takashi Mochizuki on Twitter, doesn't indicate that Sony is looking to sunset the PS4 anytime soon. Instead, it means Sony expects PlayStation 4 sales to begin declining from here on out, as it's reached a point of market saturation where fewer new customers will be coming in year-over-year.

When we last checked in with Sony at the end of April, it reported that it has sold nearly 80 million PlayStation 4 units around the world so far. It makes sense, then, that Sony would expect a decline in console sales and lower profit projections for its PlayStation division as a result. Where will it make up the difference? It's primarily turning to software and services for that.

That means we'll see more exclusive IP lined up for the PlayStation 4 in the years ahead, along with a focus on pulling in more PlayStation Plus subscriptions. PS Plus has been a major revenue stream for Sony this generation, so making it more appealing to the hold outs that remain certainly isn't a bad strategy to bolster income. Areas that need more work as we move forward include PlayStation Vue and PSVR, which Kodera said has been growing slower than expected during his presentation.

According to another of Mochizuki's tweets, Kodera says that the PlayStation Division will have a period where it'll "crouch down once" in order to pave the way for future growth. He expects that period to last until March 2021, which could mean that's the year Sony is thinking about launching a new console. Time will ultimately tell, but don't expect the PS4 to be replaced at any point in the near future.