Sony PlayStation Sales Finish Strongly In 2009, But Crippling $1.3 Billion Drop In Revenues Remain

Sony has stated December 2009 PlayStation 3 sales in the U.S. rose nearly 90 percent shattering the existing monthly record after a 25 percent price cut attracted holiday shoppers to the rapidly evolving console. PlayStation 3 game sales also advanced 60 percent from a year earlier, Sony said in an e-mailed statement. Software numbers were obviously incredible with massive hits like Uncharted 2: Among Thieves, Assassin’s Creed II, Call of Duty: Modern Warfare 2 and Final Fantasy XIII smashing sales charts. In the USA, Sony sold 726,000 PS3 players last December, according to NPD Group Inc. and Sony stated that in the five weeks following the last week in November they sold 3.8 million units worldwide. However, things are not so sunny overall in comparison to last year, where there has been a $1.3 billion drop in Sony’s revenues from its line of PlayStation systems.

Gamasutra has written some excellent thoughts towards PlayStation’s performance in 2009,

According to comments made by Wedbush Morgan analyst Michael Pachter, we estimate that PlayStation 2 software revenues dropped by around $700 million in 2009, compared to 2008. That decline alone would explain more than half of Sony’s loss. The PlayStation 2 hardware also received a price cut in 2009, which could have contributed another $150 million in lost revenue.

Another $225 million or more have come from the annual loss of 1.3 million PSP system sales. According to Creutz of Cowen & Company, the handheld software segment shed $200 million in annual revenue from 2008 to 2009, and we estimate at least half of that loss can be attributed to declining PSP software sales.

Without more precise figures, we cannot illuminate the situation further. However, the general outline is clear: The PlayStation 3 platform — albeit the subject of a recent price cut — is still growing, but the contraction in Sony’s legacy and handheld segments has overwhelmed those gains. Sony cannot revive the PlayStation 2, and that system’s revenue contribution is on a terminal trajectory. (To use Pachter’s terms, the PlayStation 2 will “cease being relevant in 2010.”) We furthermore remain skeptical that Sony can reverse the fortunes of the PSP, at least at retail.

By mid-2010 we should know more about whether Sony will continue to back the PSP platform, and in particular the premium PSP Go model. We would not be surprised to hear of a successor to the PSP in 2010, especially if it provides backward compatibility to first-generation PSP software and network integration comparable to modern mobile devices.

Sony does have several ace cards coming to the PS3 console in 2010 that could really capitalize on the momentum brought forth by the cheaper PS3 slim. Sony is planning to vigorously enhance the network content and services aspect of the PS3, as well as tapping into a wider audience through the introduction of a new Motion Controller. PlayStation 3 units will become available to play 3D stereoscopic games through a firmware update, scheduled to be available in summer of 2010. Playback of 3D content on “Blu-ray” discs will also be possible by upgrading PlayStation 3 with a further firmware update.