PS5 Sales Jumped 75% Last Week in the UK Following Temporary Price Cut - Sales
by William D'Angelo , posted on 01 August 2023 / 3,678 Views
Sales for the PlayStation 5 increased 75 percent last week in the UK, according to GfK data provided to GamesIndustry. Revenue for the PS5 jumped 63 percent week-on-week.
The reason the PS5 sales increased so much last week is due to Sony temporarily cutting the price of the PS5 in the UK, Ireland, Germany, Austria, and India. In the UK, the PS5 has been discounted from £479.99 to £399.99 until August 10.
The standard PS5 was the biggest driver with sales up 205 percent week-on-week, while revenue increased 162 percent with the average selling price going from £491 to £421. This version of the PS5 accounted for 73 percent of all PS5 sales for the week.
Last week for the PS5 was the third best-selling week of the console in 2023. The two best-selling weeks for the PS5 came in February due to the popularity of the God of War: Ragnarök bundle.
Sony announced last week the PlayStation 5 has sold over 40 million units as of the week ending July 16, 2023.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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I find it hilarious right now looking at CEX prices. A USED console is £435 (at least less than it used to be at £600) but a purple or blue controller? £70, used with someone elses grubby hands on them before you. They retail normally for £65 but right now are on sale for £40 and are readily available. CEX are weird.
That's a big discount, so yeah, expected to have strong growth in sales.
Though there is some FOMO here, have a permanent price cut. Sell the console at a loss or barely breaking even and reap the money from software and subscriptions.
My take: look at software and subscription sales of the Nintendo Switch. Notice also how the Switch is potentially the only piece of gaming hardware which has never had more than a very temporary price cut. It has more 20mil sellers than I believe any console ever, it's become the third best selling console of all-time despite coming directly after the Wii U, etc. Heck, Pikmin 4 just blasted past FFXVI in its Japanese launch.
My theory is that when you put a console on sale, FOMO causes a major boost to hardware sales...but it's hardware sales to those who were on the fence about buying the console in the first place. As a result, you get a player base of ppl who are not as willing to fork out money on gaming goods, as well seemingly hesitant to really play any video games. In other terms, you get high hardware sales but virtually no shift in software numbers.
As such, I'd say that Sony's best strategy for making a profit is to maintain the current console price BUT put strong emphasis on marketing their titles as well making great games. Word of mouth should be the motivator for somebody to purchase a console, not a price cut; ppl who are influenced by word of mouth will continue to be influenced, causing a positive feedback loop of them constantly buying more games.
EDIT: to add a caveat, I believe this theory is mostly consistent when talking about those who are over the age of 8 or 9. Younger and it'll probably just be the parents buying the games, regardless of how much the child wants it (the parent is the decider and sometime lack an understanding as to whether their child rlly enjoys gaming or if it's simply a distraction from boredom while shopping at the shoe store or wherever). This is why DS/3DS could pull off price cuts so well.
If not cutting the price leads to higher software sales then why is the Switch Tie Ratio(number of games sold per console) only 8.13? For comparison the PS4 is 12.13 as listed on VGChartz, although this only covers software sales up to September 2020 when Sony stopped giving PS4 data(changed to PS4 & PS5 combined). In fact every Playstation home console has a higher tie ratio than 8.13 and all PlayStations have been discounted throughout their life.
Sony uses steep discounts on game software to bolster up their software numbers. Horizon Zero Dawn would not be at 20M+ if Sony used the same model as Nintendo.
Not that it's a bad thing, of course. Just two different directions.
We're discussing revenue and profits, not the number of games sold; the tie ratio is irrelevant here for the reason that third-party "dwarfs" (as put by an article from May 2022) first-party sales figures on Sony. Also worth noting is that while little is known about the amount Sony generates in allowing third-party titles to publish on their platform, it certainly isn't a significant generator of revenue. In other terms, I don't suspect Rockstar nor Activision really have to send ANY of their profits to Playstation when selling on their console seeing how high-demand titles like GTA and CoD truly are.
Discussing how this may contradict my theory on consumer tendencies: okay, maybe it provides some nuance I failed to consider; I was talking from a lens of putting first-party before everything else (i.e., the Nintendo Lens). Maybe I could provide the concession that ppl who are reluctant to purchase video game consoles unless a discount is provided may also be willing to pick up a few standard third-party games seeing that they cost so little. This fails to contradict that I believe such strategy to be counter-intuitive in generating revenues, however it does adjust how I view the tendencies of consumers (or rather, accounts for an additional variable I overlooked: i.e., the price of software).
Sony gets 30% of every third party sale on PSN just like Xbox, Nintendo, apple Google etc.
So if a CoD game generates $1b on PSN then Sony keeps $300m. This is why the method of selling hardware below cost is viable.
see other response (to Dallinor).
...also, not all third-party producers need comply with the 30% revenue split. For instance, larger developers such as Activision or Rockstar could likely pull out with better deals in exchange for further benefits; e.g., Activision agrees to produce Crash Bandicoot and Spyro games in exchange for low revenue split. From what I have found, 30% is just a general estimate which is applied on almost all small developers.
Third party revenue on PS is gigantic, because PS consoles sell an unbelievable amount of software. PS4- 1.562 billion units. Switch -1.036 billion. Despite selling more total units, Switch has only reached about 66% of total PS4 software sales. So yes, their first party sell far more, but far less games are sold in total.
but again, revenue is different from sales figures. The average switch title costs significantly more than that of PS4 in the long-run. I have tried researching for revenue data but it seems neither has decided to disclose this information. Estimates say PS4 generated a total revenue of $30bil whereas Switch was around $24.5bil (February 2022)...however, these statistics aren't the revenue received by Sony nor Nintendo, rather just the total money spent on both platforms. Nintendo will take home significantly more of its repository seeing that ~84% of all software sales are first-party. Again, this is all just total speculation however; neither of us can provide truly concrete statistics.
PlayStation division revenue is massively ahead of Nintendo Revenue though, 3.6 trillion Yen vs 1.6 trillion yen during the last financial year. So there is no evidence that people who buy the Switch bought more products at all, or spent more revenue.
Nintendo makes tons of money becaus their profit margins are incredibly high and hardware is sold at a profit. Their average customer is spending significantly less money than a PS or Xbox customer.
You can find the revenue from their financial reports, both are posted on their websites.
I'm not engaging any further. I'm not a fan of debates which consist of "oh the average Nintendo customer is spending less money...this is what I think despite having not proven why such assertion is valid". Also, to remind you for the third time now, this discussion is about profits and revenue with respect to the Switch alone. You are encouraged to introducing examples as to how my initial claim is potentially invalid or may introduce some failure in addressing certain nuance; just don't turn this into a "oh well Nintendo is valued less as a company than Sony". Like what does that have to do with anything?? Yeah, not surprising that a company which has vertically integrated across several different industries is more valuable than the one which literally only makes videos games...and sometimes movies. This has nothing to do with the discussion. I'm open to adjusting my beliefs, however you're unable to meet me where I'm at. You provide a counter, I argue the counter until sufficiently convinced otherwise. Debate is a skill which involves far more than pulling up borderline irrelevant statistics for the hell of it; you need to reach conclusions and defend said conclusions.
I posted the literal total revenue figures for Nintendo and PlayStation division from their most recent Finanial reports. You’re talking nonsense.
okay so you take nothing away from my comment? gotcha. good discussion
That number is from April 2021, so by now it should be closer to 1.7 Billion units.
Best deal is £399 with a free game.
