PS4 Sales Are Going To Slow, Sony Warns

PlayStation 4 may have given Sony a welcome nudge upwards in its latest financial results, but the company is warning that sales are likely to slow in the year ahead. Sales in Sony's Game & Network Services division rose 6.3-percent year-on-year, to $14.73bn, an increase which the company says was primarily down to greater sales of PS4 and games for the console. Now, though, the PS4 enters a new stage of its life, Sony warns.

Operating income for the division hit $1.21bn, a "significant increase" Sony says, mostly down to cost reductions in building the PS4 and the rise of games sales. Price cut promotions for the console did eat into that a little, as did a downward trend in games for PlayStation 3. Had foreign exchange rates not hit the company, year-on-year performance would have been even more impressive: a 16-percent increase in sales on a constant currency basis, in fact.

Nonetheless, Sony has been clear that the PlayStation 4 is aging. "Three and [a] half years have passed since the launch of PS4," chief financial officer Kenichiro Yoshida said of the full-year 2016 results, "and we expect annual unit sales in FY17 to decrease year-on-year to 18 million units." That should be offset to some extent by games sales, mind, with "some major software titles" expected to launch over the next year.

"We believe we are in the harvest phase of the platform," Yoshida concluded. Sales of PS4 totaled 20m consoles in the full 2016 financial year. Sony had been surprised by demand for PlayStation VR, which sold 915,000 units alone as of late February this year.

It wasn't all good news for Sony's hardware divisions, mind. Sales decreased 32.7-percent year-on-year in the smartphone business, down to $6.778bn. Sony blames that on dwindling demand predominantly in Europe, the Middle East, and Latin America; it also downsized considerably in locations where it was struggling. A decrease in sales had been predicted, but Sony's Yoshida says the company was surprised by the extent to which they fell.

Looking ahead, a small rise of 1.9 million units year-on-year is predicted. That'll predominantly be down to sales in the Middle East and Europe, with Sony estimating around 16.5m units being sold. In FY16, the company sold 14.6m units.