Sony, Nintendo: Sales in cans with lead in the wing?

Business news Sony, Nintendo: Sales in cans with lead in the wing?

There was a time when brick and mortar sales accounted for nearly all of the video game giants’ revenues. The world was so simple. The customer went to a store, bought his game in a box and played it with pleasure and good mood. But with faster internet connections and the advent of hard drives in our consoles, our ways of consuming have evolved along with business models. We started by buying DLCs, Season Passes and then 100% digital games. Today, the part of the dematerialized is essential for the good financial health of our giants. The proof with the recent reports from Sony and Nintendo.

The good numbers of 100% digital are anchored in the long term

This morning, Sony and Nintendo both released their financial statements for fiscal year 2021. Figures released on the same day reveal some similarities, such as a slight drop in sales of the PlayStation 5 and Switch. † What the numbers show again is that the revenue generated by the dematerialized products has become vital for the manufacturers

At Sony, the figure, including sales of games in digital format and DLC, was 1.424 billion yen (10.3 billion euros), a slight decrease from the previous year, despite a better last quarter than the previous one. The revenue generated by the strict sale of games in digital format is nevertheless increasing, 570,842 million yen (4.1 billion euros) compared to 542.484 million yen (3.955 billion euros) for the fiscal year 2020. The share of digital (games + DLC) represents 53% of the revenue of the Game & Network Services segment. If the revenues of the Network Services branch are not taken into account, it rises to more than 62%. In the field of software, dematerialized now represents 66% of game sales on PlayStationcompared to 65% last year.

Sony, Nintendo: Sales in cans with lead in the wing?Sony, Nintendo: Sales in cans with lead in the wing?

On the Nintendo side, we recognize the “strong salesdownloadable versions of several Switch games and increased sales of additional content, most notably the Animal Crossing: New Horizons Happy Home Paradise expansion and the Mario Kart 8 Deluxe Booster Course Pack. Mario’s forerunners explain that the good numbers associated with digital sales, coupled with the good health of Nintendo Switch Online, contributed to the digital results increasing by 4.5% compared to the previous year, to 359.6 billion yen (2.6 billion euros). At Nintendo, 100% digital (microtransactions, dematerialized games, etc.) represents over 42% of software-related revenue† An overall stable result compared to last year. However, the number of boxed game downloads increased in the fourth quarter and almost reached the level of the first quarter of 2021 (66.8 billion yen, 487 million euros).

Sony, Nintendo: Sales in cans with lead in the wing?Sony, Nintendo: Sales in cans with lead in the wing?

The dematerialized stronger than ever?

Sony, Nintendo: Sales in cans with lead in the wing?

These dematerialized results, if very close to last year’s, are in fact quite impressive. when we take the time to contextualize. The figures for the previous fiscal year (FY20) were based on a period from April 1, 2020 to March 31, 2021. However, this period was disrupted by incarceration phases necessitated by the health crisis, around the world. This produced a explosion consumption of games in digital format. Some analysts predicted a sharp decline in this figure when things return to normal. Although there were still limitations at the time of recording the results (April 1, 2021 to March 31, 2022), they were not comparable to those a year earlier. What these results are starting to prove is that Covid or not Covid, the players seem to have really adopted the dematerialized on their way to access video games.

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