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PlayStation 4 sales are slowing as PS5 looms this year

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Sony’s PlayStation 4 sales were down 25 percent year on year this holiday season, with the company shipping 6.1 million units for a total of 108.9 million as of the end of 2019. It’s the lowest holiday quarter for the PS4 since its launch period in 2013.

Third-quarter revenue at the PlayStation division was down 20 percent to 158.5 billion yen ($1.46 billion), which Sony accounts for by pointing to lower sales of hardware and third-party software titles. The company now expects revenue for the fiscal year to be 50 billion yen ($459 million) lower than previously forecast, a 3-percent drop.

Despite the slightly reduced forecast, this won’t be too surprising to Sony. Video games are a cyclical business, and while the PS4 has been a far bigger success than almost anyone predicted, it is very much coming to the end of its cycle. Sony has already started the hype machine for the PS5, which is set to drop toward the end of this year, and the company only has a couple of big-name first party PS4 titles left on its slate — The Last of Us Part II and Ghost of Tsushima.

PS4 sales peaked a few years ago, and the system hasn’t received a formal price cut since 2016. The biggest question for Sony is how it can convince the hundred-million-plus PS4 owners to stay within the PlayStation ecosystem for their next generation; you can expect the company to start making that case sooner rather than later.

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