The PS5 doesn’t need aggressive sales at this point in its life cycle, according to Sony CEO Hiroki Totoki.
During a recent interview with The Wall Street Journal, Sony CEO Hiroki Totoki explained that the company is now taking a different approach to its PlayStation business as the PS5 moves into the latter half of its life cycle. Rather than prioritizing aggressive PS5 hardware sales, the console maker is increasingly focused on generating recurring revenue from the large user base it has already built.
“It is lucky, you know, we are in the latter half of the lifetime cycle of a PS console,” Totoki said. “That means that we do not need to aggressively sell the console today.” Instead, Sony’s focus is shifting toward monetizing existing PlayStation users through games, services and other forms of recurring revenue.
Totoki highlighted the scale of that audience, saying that PlayStation already has more than 125 million monthly active users. “And rather than that, we’re focusing on recurring revenue from the current, you know, the user base,” he mentioned. “And how to monetize from the users is quite important for us.” While hardware remains an important part of the ecosystem, Sony can now generate substantial ongoing revenue from digital games, downloadable content, subscriptions and other services after a console has been sold.
Totoki also discussed Sony’s transformation into an entertainment-focused company. He noted that the company’s entertainment businesses i.e. gaming, movies, TV, and anime, now account for more than 67% of its revenue, and it plans to continue to invest in these areas.
Sony has increasingly looked to capitalize on the strength of its intellectual properties by transitioning successful PlayStation franchises into other mediums. Totoki pointed to the opportunity to adapt gaming IP into TV shows and motion pictures, saying that this can expand the audience while potentially encouraging existing fans to return to the games.
