PlayStation launches used to lose money — but with PS5, Sony is expecting its best year ever

If you look back at the history of profits for Sony’s PlayStation division, you can see a clear cycle. PlayStation makes the most money when a console is mature. This happens for a lot of reasons. Manufacturing costs come down, and more consoles in the market mean a larger audience that buys games. Sony Interactive Entertainment’s worst years for profits, meanwhile, are the transition years from one console generation to the other.

Sony’s game profits went into the red during the first year or two of the PlayStation, PS2, PS3, and PS4. For the PS3, it was more than a year or two. You can see those patterns in a useful chart from Niko Partners senior analyst Daniel Ahmad on Twitter.