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PS4 sales down at Sony, but network services revenue gets 'significant' boost

Both sales and operating income are down in Sony's video game division due to a drop off in PlayStation 4 hardware and software sales.

Both sales and operating income are down in Sony's video game division due to a drop off in PlayStation 4 hardware and software sales. 

As noted in the company's financials for the full-year ended March 31, 2020, sales in the Games & Network Services segment fell by 14 percent year-on-year to 1.97 trillion yen ($18.4 billion), while operating income decreased to 238.4 billion yen ($2.2 billion) from 311.1 billion yen ($2.9 billion).

Sony attributed that sales dip to a reduced appetite for PlayStation 4 hardware, with the console selling 13.6 million units in FY19 compared to 19 million units in FY18. 

Falling software sales were also highlighted as the "primary" reason for a decrease in operating income, with Sony explaining the impact of "major hit titles" had diminished since last year, when it released both God of War and Marvel's Spider-Man.

That decline, however, was partially offset by an upswing in sales revenue from network services like PlayStation Plus and the benefit of cost reductions. 

In fact, Sony explained that the spread of COVID-19 has been one of the main drivers of network services revenue, causing an spike in game downloads, sales, and PlayStation Network gameplay hours. 

"Recently, network services revenue has increased significantly as game play hours on the PlayStation Network have reached 1.5 times that of the Christmas season," explained the company. "Sales of games downloaded from the network, as well as network subscriber numbers have also increased significantly since March."

Commenting more on the impact of COVID-19, Sony said that, at this point in time, "no major issues have arisen in the game software development pipelines of either our in-house games or those of our partners." 

It also reiterated that it remains on track to launch the PlayStation 5 later this year, despite "some challenges" relating to production and product testing. As for the PlayStation 4, Sony said that production has been "slightly impacted by issues with the supply chain for certain components," but that it has been meeting demand in the short-term. 

Due to the unpredictable nature of the pandemic, Sony has declined to issue a forecast for the next fiscal year, and will do so when it has more information in early August.

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