Sony predicts 20m PS4 sales in FY2016

Sony has produced its forecast for FY 2106: a year in which it expects the PlayStation business to continue its current expansion and become even more important to the company as a whole.

In the documents, released today, Sony predicts that it will sell 20 million PS4 units between April 1, 2016 and March 31, 2017. If it does, it will add a remarkable 50 per cent to the current worldwide sales total, which presumably sits somewhere north of the 36 million it officially announced in January.

Sony also expects the Games and Network Services division which houses the PlayStation business to increase sales by 8.3 per cent over the course of the year, resulting in an operating income of 135 billion Yen, a figure which would equal the profits of the two previous years combined. Should the forecasts be accurate, G&NS would have the highest revenues and second highest profits of any division at the corporation.

But what's the reasoning behind the prediction of this bumper year? Sony already has a dominant hold on what many predicted would be a disappointing (and in some cases final) generation of dedicated consoles, estimated to have doubled Microsoft's sell through, so what makes the board think it can sell more boxes this year than Microsoft has during the entire generation?

There are three obvious possible reasons, outside of the normal expectations of market and install base growth. Firstly, PSVR is going to be a consideration, although how sizable the attach rate will be and what contribution Sony actually expects it to have to fresh PS4 sales is unknown and undetailed in the report. Nonetheless, many pundits have put Sony in pole position for the early growth of tethered VR, with a low-cost headset and a large hardware-capable existing install base offering a decent headstart. With at least one bundled PSVR and console hardware package inevitably in the offing, PSVR will undoubtedly shift some units, very possibly to sectors of the market previously unmoved by PlayStation's offering.

Which brings us to the second potential influence - the much-rumoured, definitely happening but as yet publicly unconfirmed PlayStation 4.5/4K/Neo. Currently, Sony's leaked hardware update is upsetting many consumers, who fear that their existing consoles will become obsolete much more quickly than they bargained for, sparking debates about possible poor performance from PSVR and future games. Developers have also expressed concerns about a potentially fractured platform, a split which would make development considerably more difficult.

Since Sony is yet to officially confirm its position on the machine, its components and the criteria for developing for it, we have to rely on information which came alongside the leaked specifications, guidance which stipulated that all games, including PSVR experiences, to be released in the future for PS4 must run comfortably on both machines. This line is a tricky one to tread. Keeping nearly 40 million existing customers happy with their purchase and experience, whilst simultaneously dangling the carrot of better performance, is very difficult indeed, as the sales of any superceded console post-successor release can attest to. All the same, if Neo is due to launch before next April, and that 20 million number includes predictions for it, it should be a decent contributor - although it would undoubtedly cannibalise sales of the current iteration.

Lastly, there's the option of a price drop, a possibility made more plausible by the mention of the decreased production costs in the forecast document. Whilst it's certainly not impossible that Sony would reap that margin for itself, at least part of the saving will probably be passed on. With Sony having publicly stated that the PSVR hardware will be sold at profit from day one, there's room to manoeuvre a dropped price on the console itself. If the Neo/4.5/4K unit also launches before the end of the financial year, the cost of the original will almost inevitably be lowered to incentivise sales of remaining stock anyway.

It's also worth reiterating that it's entirely possibly that Sony could bump the figure up to 20 million without any of these factors: the margin of increase (2.3 million extra units) would actually be lower than the jump between last year's total and the year prior, which saw 2.9 million extra PS4s hit homes, with the yearly total rising from 14.8 million units to 17.7 million.