Sony reaffirmed that the PlayStation 5 online game console is on monitor to ship throughout the vacation season this yr. The Japanese firm made the announcement in a quarterly earnings report at present by which it stated its quarterly and annual revenue slipped for video games.

Game builders and different corporations within the ecosystem who’re relying on the launch will seemingly breathe a sigh of reduction that the pandemic isn’t making issues too tough for Sony to drag off the launch, which doesn’t have a exact date but.

“Regarding the launch of PlayStation 5, although factors such as employees working from home and restrictions on international travel have presented some challenges in regards to the part of the testing process and the qualification of production lines, development is progressing with the launch of the console scheduled for the 2020 holiday season,” Sony stated within the report for the quarter and monetary yr ended March 31. “At this point in time, major problems have not arisen in the game software development pipeline for Sony’s own first-party studios or its partners’ studios.”

Sony stated that PlayStation Four console gross sales have hit 110 million, up solely barely from the earlier quarter.

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As for the quarter, Sony didn’t actually have the suitable recreation prepared for the pandemic. It delayed its main title, The Last of Us Part II, not as soon as however twice, pushing it from February to June 19. Meanwhile, Nintendo did nicely with Animal Crossing, and Activision Blizzard carried out nicely with Call of Duty: Warzone.

Shelter-in-place was solely in impact over the last two weeks of the March 31 quarter, so the affect wasn’t large throughout the closing quarter of Sony’s fiscal yr. But throughout the first fiscal quarter ended June 30, Sony will seemingly get some profit from shelter-in-place situations that favor video games over different types of leisure.

Sony’s large video games — The Last of Us Part II and Ghost of Tsushima (July 17) — will seemingly assist elevate gross sales at a time when console {hardware} will most likely fall off a cliff as players watch for the PS5 launch. Console gross sales usually transfer in a cycle, with the ultimate yr of a console era often being robust in software program gross sales however weak in {hardware} revenues. Sony hasn’t made a exact forecast about that.

During the quarter, Sony stated that 4 of its factories shut down from January 24 to February 9 due to the pandemic. But since February 10, the entire factories have reopened, although there was some disruption within the provide chain. The PlayStation Four {hardware} noticed a slight affect on provides, however Sony stated it was addressed with stock and gross sales are trending nicely.

Meanwhile, gross sales of video games downloaded from the community and PS Plus and PlayStation Now subscriber numbers have “significantly increased.”

What the numbers imply

Sony reaffirms PS5 holiday launch but profits slip for games

Unreal Engine 5 demo reveals what a PS5 recreation can seem like in 2021 or later. For the quarter ended March 31, the sport and community companies division noticed income of $ billion, down from $4.6 billion a yr earlier. Operating revenue for the quarter was $431.5 million, down from $597.eight million a yr earlier.

That’s not nice, however it’s fairly good for 1 / 4 with no main recreation launches and solely two weeks of profit from shelter-in-home situations. I’d count on that the efficiency for the quarter ending June 30 can be higher, particularly with progress from PlayStation Plus or PlayStation Now subscriptions.

Sony closed the March 31 fiscal yr with $14.1 billion in money, up barely from $13.7 billion a yr earlier. It has $7.57 billion in short-term debt. That’s not a foul place to have when it comes to launching the console. It means Sony received’t be going via a interval of monetary weak point because it enters into the upper advertising and marketing prices for the brand new era of consoles.

By the top of the yr, gross sales ought to begin choosing up once more because the console launches and new video games get launched. One of the dangers of this era is that Sony’s manufacturing prices for its machine will likely be excessive, or not less than larger than Microsoft’s prices. Microsoft additionally has much more money and will afford to cost its Xbox Series X beneath Sony’s PS5. If Sony had been going into this cycle with out a lot money or with out a lot monetary energy, then it will be fairly susceptible to a Microsoft low-price technique.

But I don’t see that downside proper now, and that’s factor for Sony, the PS5, and the final recreation ecosystem.