Sony (SNE) Q3 2020 earnings report boasts gaming revenue increase despite selling PS5 at a loss

Sony's gaming sales accounted for a 40% year-over-year increase thanks largely software and network services to support the PS5's launch.

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With Sony having launched the PlayStation 5, it was a big holiday season for the tech giant. Reportedly, the cost of building the PS5 is currently more than the cost of selling it, but that didn’t stop Sony from posting strong gaming revenue increases year-over-year in its recent Q3 2020 financial report. This was due largely in part to game and software sales, as well as network services like PlayStation Plus.

Sony reported its Q3 2020 earnings report on its investor relations website on February 3, 2021, which boasted a 40% increase in gaming revenue year-over-year from Q3 2019. With the PlayStation 5 having launched this previous season, Sony sold through 4.5 million units of the new generation of consoles (aided by another 1.4 million PS4s sold for a total of 5.9 million in gaming hardware sales). However, the PS5 is not where Sony earned its win. The PS5 is currently being sold at a loss (as in it costs more to build than its current retail price). It was in gaming software and network services that Sony made the lion’s share of its revenue.

Sony revealed a total 883.2 billion yen in gaming and network sales revenue in Q3 2020, up 40% YoY to its Q3 2019 numbers, thanks largely to software sales and services like PS Plus to support the PS5's launch.
Sony revealed a total 883.2 billion yen in gaming and network sales revenue in Q3 2020, up 40% YoY to its Q3 2019 numbers, thanks largely to software sales and services like PS Plus to support the PS5's launch.

Sony was able to sell through 103.7 million games between the PS4 and PS5, 18.4 million of which were first-party and 53% of which where digitally downloaded. Add to this an increase in PS Plus traffic up to 47.4 million subscribers, up from 38.8 million in Q3 2019. Add this to the PS5’s strong sales despite being in a loss and that’s where Sony garnered a massive revenue increase in its gaming endeavors. With the trend ongoing, Sony’s gaming pursuits should be in a strong position for the foreseeable future as software and service support its console costs.

As major companies continue to post their quarterly financial results and reporting, stay tuned to Shacknews for more news on the latest activity. You can find a full list of releases, reporting, and resources on our Q1 2021 earnings release schedule.

News Editor

TJ Denzer is a player with a passion for games that has dominated a lifetime. When he's not handing out beatdowns in the latest fighting games, exploring video game history, or playing through RPGs with his partner, he's searching for new food and drinks in the constant pursuit of good times with good people inside and outside the South Texas area. You can also find him on Twitter @JohnnyChugs.

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