Sony wants to grow first-party games on 'PS5, PC, and other platforms'

Sony plans to expand access to its first-party software in an effort to boost sales and resurrect profit margins.

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PlayStation isn't doing so hot right now. Revenue is at an all-time high, with Sony generating a record-breaking $9.76 billion over the holidays. But operating profit is quite low. PlayStation only made $582 million in operating profit during Q3FY23, the lowest period since 2019 and a represented 6% profit margin. Costs are the main reason for the lower operating profit, including the $3.7 billion Bungie buyout alongside rising game budgets. (Transparency: PlayStation's Q3 operating profit also reflects $200 million+ in PS5 console inventory that was shifted to Q4).

In a bid to increase operating profits, Sony could follow Microsoft's game plan and break exclusivity for select first-party PlayStation games. Microsoft has announced plans to bring 4 first-party Xbox games to PlayStation and Switch, including Hi-Fi Rush, Pentiment, Grounded, and Sea of Thieves. What if Sony does the same thing, bringing heavy-hitters like Spider-Man to Xbox? Sony wants to boost profits, and a good way to do that is to increase software sales, hence why a lot of first-party PS4 and PS5 games are now also available on PC.

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In a recent Q&A session with analysts, Sony Interactive Entertainment CEO Hiroki Totoki said this about PlayStation games on other platforms:

"Another driver will be first-party titles. Strong titles that achieve growth on PS5, PCs and other platforms will widen our margins. We believe that we have opportunities for margin improvement and intend to pursue them aggressively."

There's no clarification on exactly what this means. Will PlayStation games like The Last of Us show up on Xbox? Is Totoki referring to already-existing cross-platform games and initiatives, including first-party releases on PC? Is the "other platforms" part referring to mobile, and not Xbox and/or Nintendo Switch?

Sony has seen decent success on PC, where it's first-party games have generated over $850 million in the past 7 quarters combined.

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It's worth mentioning that the above quote is based on Sony's official translations of the Japanese webcast that went live on February 14th. If you listen to that webcast, the live translations will be pretty different. Here's a transcription of what the webcast actually said about this topic:

"And the other potential driver is the first-party title generation. In the past, as you all know, we wanted to popularize console. The first-party title's main purpose was to make the hardware or the console popular, right? It is true, right? But there is a synergy to it.

"So if we have a strong first-party content, not only with our console, but also other platforms like computers. And first-party can be grown with multi-platforms, and that can help operating profit to improve. So that's another one that we want to track and work on. I personally think there are opportunities out there for improvement of margin, so I would like to improve our margin performance."

Sony cautions investors and readers that the provided transcriptions are to replace the live translations, and that there will indeed be discrepancies between the two:

"This English summary, which is intended to replace the simultaneous translation of the question and answer session previously provided, is not intended to be a direct translation of the question and answer session. As a result, there may be some differences between this English summary and the simultaneous English interpretation provided at the question and answer session."