A powerful brand will only get you so far, PlayStation

Sony expects hardware sales to decline in 2024 and it’s all because of the company’s past choices

The PlayStation5 sold well during the holiday season, software sales are up, PSN active user numbers are up… but 2024 shapes up to be a troubled year if Sony’s own estimates are any indication. (Image: Cash Macanaya, Unsplash)

Results are in and feelings are mixed: Sony reported its earnings for the previous quarter – October to December, the all-important holiday season – and there’s stuff to like, as well as stuff to be concerned about. On one hand, PS5 sales were up (8.2 million units compared to 7.1 million for the same quarter last year), helping the console’s user base reach almost 55 million systems worldwide. Software sales were also up, as was the number of PlayStation Network active users.

On the other hand, Sony was hoping for considerably higher PS5 sales during its 2023 financial year ending on March 31st, but the initial target of 25 million units has now been revised to 21 million. What’s more, Sony expects PS5 sales to start declining in 2024, as the system “will be entering the latter half of the console cycle” according to Sony president, COO and CFO Hiroki Totoki.

But… but Sony has already won the Console Wars, right? It should be able to make its moves in the gaming console market and plan ahead from a position of strength, no? So, what gives?

It’s all about the software. PlayStation console sales have always depended on highly desirable first-party, exclusive titles, be it at the beginning or later on during each home system’s product cycle. Things did not play out the same way during this PlayStation generation, though: the PS5 has only offered a handful of AAA exclusive titles so far – namely Ratchet & Clank, Returnal and Spider-man 2 – and just one of those worked as a system-seller. Instead of delivering more PS5 exclusives, as it traditionally would, Sony chose to release its three most important titles – Horizon Forbidden West, Gran Turismo 7 and God of War Ragnarok – as cross-gen productions also available on the aging PS4.

Spider-man 2 was mightily impressive – and it has already sold more than 10 million copies worldwide – but Sony clearly hoped that it would drive more PlayStation5 sales in 2023 than it actually did. (Image: Sony)

This strategy obviously resulted in much higher sales for each one of those games, but it also gave to tens of millions of PS4 owners reason to hold on to their last-gen systems instead of upgrading to a PS5. Most of them did not get a PS5 last year just for Spider-man 2 – Insomniac’s title has sold about 10 million copies so far, while the PS4 user base consists of 120 million consumers – hence the lower than expected sales for Sony.

It’s also hard not to include the small matter of Sony’s numerous remakes and remasters for the PS5 in this conversation. Those may be an easy, cost-effective way for Sony to secure some additional revenue, yes, but six of them in such a short time – Demon’s Souls, Spider-man, The Last of Us Part I, Uncharted: Legacy of Thieves Collection, The Last of Us Part II and the recently announced Until Dawn – may have been just too many, especially compared to the original productions developed for the PS5 in the same time frame.

Sony itself expects PS5 hardware sales to decline in 2024 because, simply put, its software is not where it should be at this point in its lifecycle.

It’s fair to say that more than 50 million gamers who purchased a PS5 did not do so in order to play more technically advanced versions of older hits, but actually play new games and enjoy the kind of entertainment experiences they did not have access to before. This is what Sony has failed to deliver up until now, so it’s no surprise that even the company itself does not expect consumer interest in the PS5 to be where it probably should have been going forward.

No PS5 first-party exclusives for a long time, so how will Sony handle this?

The current lack of a wide variety of true first-party exclusives for the PS5 is obviously not helping the product’s case – even worse, it seems that it will not be addressed any time soon either. Hiroki Totoki confirmed to investors that Sony will not be releasing any AAA first-party game for the PS5 during the next financial year, so consumers should not be expecting more God of War– or Gran Turismo-level exclusives for the system until April 2025 at the earliest. This is definitely not a good look for the dominant gaming console in the market today, given the undeniable importance of exclusive first-party games in any PlayStation’s library.

In 2024 Sony will probably strive to divert consumer focus from its first-party efforts to a number of AAA-level third-party PS5 exclusives, some of which the company will promote or even publish itself. Rise of the Ronin, out in March, and Stellar Blade, out in April, are examples of such titles and there may be a few more like those later on in the year (Phantom Blade Zero and Sword of the Sea currently look like solid possibilities). Truth be told, though, while all these may indeed prove to be high-quality games, they are unlikely to work as system sellers for the PS5, serving the system’s already established user base instead.

PlayStation5 owners – let alone prospective PS5 owners – will have to wait for more than 18 months for the release of the next Sony-developed, blockbuster-level exclusive title after Spider-man 2. Needless to say, that’s far from ideal. (Image: Evgeniy Kondratiev, Unsplash)

The PS5 not having a single AAA first-party exclusive game of system-seller status for almost 18 months could prove highly problematic – reminiscent of the dry spell the Xbox systems went through during 2021 and 2022 – precisely because in 2024 Sony was expected to make good for 3 years of so-so software support in the eyes of PlayStation fans. The company was supposed to convince millions of gamers to finally leave the PS4 behind and get a PS5 by releasing games that truly demonstrate what the system is capable of.

Instead of that, Sony intends to just sit back and let third party developers keep the PS5 interesting and relevant for a year and a half. This is far from ideal for a company with Sony’s experience and resources.

Still, Sony may just get away with it if it plays its cards right. PS5 sales, for instance, could receive a nice boost if the rumored PS5 Pro is released later this year and the original system gets a significant price cut. There’s always the usual, proven practice of partnering with major AAA franchises for collaborative promotions (Assassin’s Creed and FC25 would both be good fits for this). There’s also a number of very interesting indie games coming out in 2024 that would benefit from Sony’s market reach. If the company explored all of these options and redoubled its marketing efforts, the absence of first-party AAA exclusives would still be felt, but the PS5 as a whole would not suffer as a result.

For the next 15 months or so Sony will strive to divert consumer focus from its first-party efforts to a number of AAA third-party PS5 exclusives.

It’s hard to shake the feeling, though, that (even taking the COVID-19 pandemic into account) the company could have handled all of this way better. By pretty much depending on the tremendous brand power of PlayStation and largely going through the motions during the last four years or so – instead of focusing on being the bold, innovative game developer it used to be not too long ago – Sony seems to have spent much of the goodwill capital the company had built with the PlayStation crowd during the PS4 era.

It turns out that, because of some of its more profitable but controversial choices, Sony may find rather difficult to make the most out of its dominant market position in the years to come. Always a price to pay, no?


Kostas Farkonas

Veteran reporter with over 30 years of industry experience in various media, focusing on consumer tech, entertainment and digital culture. No, he will not fix your PC (again).

Veteran reporter with over 30 years of industry experience in various media, focusing on consumer tech, entertainment and digital culture. No, he will not fix your PC (again).




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