Profitability
Ongoing coverage on Profitability.
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Sony will “cautiously” continue to kill physical games media
Sony plans to cautiously discontinue physical game media for PlayStation consoles in 2028, citing the overall progression of digitalization. Despite receiving significant community feedback and understanding the concerns, the company believes this move will increase profitability by shifting sales to the PlayStation Store. While digital sales accounted for 78% of PlayStation games in FY2025, the company acknowledges that some regions and single-player games still show a strong preference for physical copies.
Xbox still not making a profit on console sales despite price rise says report
A report indicates that Microsoft's Xbox Series X/S consoles continue to be sold at a significant loss, even after a recent price increase. Component shortages, particularly for RAM, have driven up costs, with Microsoft reportedly losing around $150 per unit sold. This contrasts with Sony's PlayStation 5, which has been profitable since 2021, and Nintendo's Switch, which traditionally sells hardware at a profit, though it also faces increased costs.
Your Loyalty To Sony Or Xbox Means Nothing, Analyst Says
Analyst Mat Piscatella states that consumer loyalty to platforms like PlayStation or Xbox means nothing to corporations, as profitability is the sole driver. With the projected high cost of future consoles and the significantly higher margins on digital game sales compared to physical discs, companies like Sony are prioritizing digital distribution. This shift is seen as irreversible due to the lucrative nature of digital sales, despite concerns about game preservation.
Why Is Sony Killing Discs? It’s “All About Profitability And Control,” Expert Says
Sony will discontinue support for PlayStation game discs in January 2028, citing the increasing share of digital game sales. Analyst Rhys Elliott suggests this move prioritizes profitability and control for Sony by eliminating the second-hand market and encouraging full-price digital purchases. While potentially detrimental to consumers and retailers, the shift could benefit developers by allowing for later submission of final game builds.
Sony May Mitigate Hardware Pricing Nightmare by Simply Selling Fewer PS5s
Sony is reportedly planning to mitigate the impact of rising hardware component costs by selling fewer PlayStation 5 consoles. This strategy aims to maintain profitability despite increased prices for memory semiconductors, which are also affecting other platforms like the Xbox Series X and Nintendo Switch. The company does not expect to offer hardware promotions in the near future.
3D Realms co-founder reveals more about Zenimax redundancies
3D Realms co-founder George Broussard revealed details about impending layoffs at Zenimax, suggesting that studios not directly working on Fallout or The Elder Scrolls are at risk. He indicated that new Microsoft management is prioritizing profitability, potentially leading to significant job losses across various Zenimax-owned studios like Arkane and Machine Games. While initial reports suggested closures, further information points to layoffs occurring after the fiscal year ends on June 30.
Microsoft Boss Wants Xbox to Start Pulling Its Weight Financially
Microsoft CEO Satya Nadella stated that the Xbox division needs to become more profitable, acknowledging that the company has been subsidizing entertainment rather than monetizing it effectively. New Xbox CEO Asha Sharma is tasked with reassessing the division's strategy to ensure economic sustainability in game development and hardware.
Nintendo explains why it raised the price of Switch 2, and says the issues responsible "could have an impact not only this year but next year as well"
Nintendo president Shuntaro Furukawa explained that the price increase for the Nintendo Switch 2 was necessary due to the sustained rise in memory and component costs, which are expected to impact profitability. While acknowledging this raises the barrier to entry, Nintendo aims to continue offering engaging experiences worth the price. The company also announced a remake of Star Fox 64 for the Switch 2.
Nintendo promises a strong roster of Switch 2 games to counterbalance the recent price increases
Nintendo has announced a price increase for the Nintendo Switch 2, raising it from $449.99 to $499.99, aiming to maintain profitability amidst rising costs. President Shuntaro Furukawa promised a robust software lineup to enhance the console's value and overcome potential sales challenges, mentioning upcoming titles and potential third-party exclusives.
Popular PS5, PS4 Multiplayer Game Shutting Down After 10 Years
Rec Room, a popular free multiplayer social hub game launched in 2016, will shut down on June 1, 2026, on all platforms including PlayStation 5 and PlayStation 4. Developer Rec Room Inc. cited an inability to achieve profitability due to overwhelming costs and broader headwinds in the gaming market, particularly the VR sector. New account creation has ceased, and existing Rec Room+ memberships will be extended until the closure date.
CD Projekt Achieves Second-Best Profits Ever in 2025 as New IP ″Hadar″ Enters Concept Phase
CD Projekt reported its second-best profits ever in 2025, with its new IP "Hadar" entering the concept phase. Separately, Compile Heart announced "Super New Dimension Game Neptunia ∞ (Unlimited)" for PlayStation 5, PlayStation 4, Nintendo Switch, and Nintendo Switch 2, set to release on August 27, 2026.
Analyst: Nintendo Switch 2 Japan-only model may be generating loss of $160 per unit
Toyo Securities analyst Hideki Yasuda estimates that a Japan-only model of the Nintendo Switch 2 could be losing Nintendo approximately $160 per unit sold due to high manufacturing costs exceeding its retail price. Yasuda suggests Nintendo may need to revise pricing or release custom models to improve the console's profitability.
