Skip to main content

Long read: The beauty and drama of video games and their clouds

"It's a little bit hard to work out without knowing the altitude of that dragon..."

If you click on a link and make a purchase we may receive a small commission. Read our editorial policy.

Sony's wider problems heap pressure on PS4

Points to PlayStation Plus subscriptions and PlayStation Store sales.

The pressure on PlayStation 4 to perform this Christmas is high, as a bad quarter scythed Sony's annual profit forecasts by 40 per cent.

Sony hopes PS4 will "contribute to profitability from an early stage by diversifying its revenue streams through various network services centred on the PSN and by offering rich user experiences".

In other words: PlayStation Plus subscriptions and PlayStation Store sales. And, backing that up, is cloud gaming service Gaikai, expected to roll out next year.

What's he got up his sleeve? A horse's head?

Oh, and there definitely wasn't a hyphen between "rich" and "user", so no need for a second job just yet.

At the Tokyo Game Show in September Sony Japan executive Masayasu Ito told Eurogamer PS4 hardware will make a loss at launch, but Sony expects to immediately recoup the costs when a typical user also buys a PlayStation Plus subscription and games.

All-in-all, Sony expects a 30 billion yen profit (£190 million) by the end of March 2014, whereas last year it made 43 billion yen (£273 million).

The underachiever of this particular second quarter was Sony Pictures, which bet on Channing Tatum film White House Down and lost. Mind you, its "theatrical underperformance" wouldn't have been as noticeable had The Amazing Spider-Man not done so well the year before.

Pictures lost 17.8 billion yen (-£113 million) during the quarter compared to a profit of 7.9 billion yen (£50 million) the year before, edging the company's overall quarterly loss down to 19.3 billion yen (-£123 million).

Microsoft, on the other hand, recently posted a quarterly profit of $5.24 billion (£3.27 billion).

Sony's Game business, meanwhile, was relatively flat, posting a minuscule loss of 0.8 billion yen (-£5 million) compared to a profit of 2.3 billion yen (14.6 million) a year earlier.

Why? That PlayStation Vita price cut, although console sales were also down across the board.

PS3 and PS2 combined to sell 2 million consoles compared to 3.5 million the year before, and PSP and Vita sales halved from 1.6 million to 0.8 million.

So, PS4 to the rescue! And it's included in the year-end sales forecast: 15 million combined PS4, PS3 and PS2 sales. Last year, though, Sony sold 16.5 million PS2 and PS3s.

But the emphasis is on game sales, which are expected to be up to 360 million by the end of the year, compared to 266 million a year earlier.