Sony "Pleased With the Strong Performance" of Game & Network Services, Thanks to PlayStation

We all know by now that PlayStation is one of the key pillars of Sony going forward. Luckily for them, it’s a division that shows no signs of slowing down. Here is Chief Financial Officer Kenichiro Yoshida talking about PlayStation which was once again a highlight of Sony during their Q3 FY15 earnings report.

This business has great momentum and it’s different from our branded products and devices business, because it is increasing its service-related revenue. The installed base of PS4 hardware is expanding faster than any of our previous consoles. Sales of the product during the holiday season were extremely strong, and network revenues for the third quarter increased approximately 50% year-on-year.

The PlayStation is steadily growing into a global network entertainment platform due to the power of the PlayStation 4 hardware console, and the ability of our team to bring content creators to the platform.

In addition to a strong install base, Sony must also learn to offer compelling services in order to further monetize each console sold. As a comparison, Apple’s services, which consist of things like Apple Pay, Apple Music, iCloud, and iTunes now bring in more revenue than the company’s legendary iPod ever did. This is crucial as there is an eventual and theoretical sales limit for each device from a hardware standpoint. However, once we dive into software and services, a company can break through that barrier and make further returns on each unit sold.

After talking further about why they’re bringing PlayStation to the US, Sony touched upon on their ever growing Network & Services business and its

strong performance

Those details after the jump.

Corporate Planning & Control and Accounting Senior Vice President Kazuhiko Takeda:

In the Game and Network services segment we have upwardly revised our fiscal year operating income forecast by five billion yen to 85 billion yen, following the strong momentum of the PS4 platform. We have been especially pleased with the strong performance of network sales, which have been outperforming our expectations.

I suspect it will be some time, if ever, before Sony breaks down their services like how many PlayStation Now and PlayStation Vue subscribers they have. But if Sony is able to expand the availability of those services in a meaningful way over the next few quarters, don’t be surprised if they one day surpass hardware revenue of PlayStation. After all, the future of PlayStation is in the cloud anyway, right?