The PlayStation 5 has reached another major sales milestone, but operating income within Sony's game business is being impacted by rising development costs.
Sony has reported a significant decrease in operating income within its Game & Network Service (G&NS) segment as a result of rising development costs and recent spate of acquisitions, including its purchase of Destiny developer Bungie.
According to the company's fiscal report for the six months ended September 30, 2022, sales in the division increased by 12 percent year-on-year to 75.3 billion yen ($511.4 million), while operating income declined by 49 percent to 40.5 billion yen ($275 million).
Although sales rose, Sony highlighted a decrease in the sales of third-party titles including add-on content, and said that downturn also negatively impacted operating income.
"When we compare software sales for this quarter with the same period of the previous fiscal year, we see sales of past library titles declined sharply, while sales of major new titles remained strong. Users appear to be playing a smaller number of titles out of a desire to spend less money," said the company.
"We are actively pursuing various measures to further increase user engagement and re-accelerate the growth of our game business from both the hardware and software perspectives. We expect to see the results of these efforts contribute to sales and profit in earnest from the second half of this fiscal year and next fiscal year."
Notably, Sony said that PlayStation 5 hardware production is "progressing faster than planned" and that it produced more than 6.5 million units during the last quarter.
In terms of tangible hardware sales, the PlayStation 5 sold 3.3 million units during the second quarter of FY22, meaning the console has now sold 25 million units to date.
Looking at PlayStation Plus, the subscription service has lost 1.9 million users since it was revamped and relaunched as a Xbox Game Pass competitor, with the number of subscribers falling to 45.4 million from 47.3 million since June 2022.
"The number of PlayStation Plus subscriber accounts at the end of September decreased 4% from the end of June to 45.4 million accounts. We see that this decrease results from a greater decline in user engagement among PlayStation 4 (PS4) users than expected," commented Sony.
Looking ahead, Sony expects its G&NS division to deliver sales of 3.6 trillion yen and operating income of 225 billion yen by the end of the fiscal year on March 31, 2023. The Japanese company also expects the PS5 to sell 18 million units before the fiscal year is out.
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