02-19-2024, 06:41 PM
Quote:“Their rev (revenue) on digital sales, add-on-content, digital-downloads are at all time highs… And yet their margins are at decade-lows. This is just not acceptable,” Goyal said in an email to CNBC.
They mention how hardware production costs are now lower but they don't seem to realize Sony did some pretty agressive price cuts on the PS5 to clear out stock for the Slim and now they're already doing promotions on the Slim too (currently 15% off in Europe). I think the rising cloud server costs, wages, inflation and poor market situation in the EU overall is hurting them the most. As well as Nintendo utterly dominating the Japanese market.
6% margin for the gaming division is low at this stage in the generation though, instead of PlayStation you could buy stock in a bank or insurance or something and probably get the same return. What probably spooks investors is that PlayStation is posting these numbers with a ~75% market share vs. the Xbox. This is usually the part of the generation where you bank on the investments made and the evergreen titles.
With that said, investors expecting a 20% return on PlayStation are crazy.