TBF, Nintendo didn't release any big new games last quarter, and SIE had an unexpected viral hit in Helldivers 2. Also Switch sales are finally in their twilight years for the most part, while PS5 sales are only just starting to come down from the peak demand levels.
Normally, Nintendo brings in more operating income than SIE. They'll probably bring in more profit per quarter than Nintendo for FY '24 Q1 as well, and maybe even Q2. But after that Nintendo should be back to business as usual and I don't see PS5 Pro giving SIE the edge in profits for the holidays.
Well, Sony's OI improvement is part of a trend, isn't new or specific of a viral game. Yes, Helldivers 2 did help for this quarter, but it made a small portion of SIE's revenue/OI. Continuing this trend, over time they'll keep improving their OI until they consistently outperform Nintendo in a permanent basis.
This graph is from last year, very likely they'll update it at the end of this month. In FY23, they had 290B yen, recovering from the acquisition costs but still not at the 346B they did in FY21.
In recent years they had many costs related to acquisitions that apparently will highly ease out during FY24, which are the main reason of why their OI did stop growing (combined with the increase of hardware manufacturing and shipping costs).
In recent 5 years (Jimbo + Hermen era) they also highly grew their internal teams to allow them work in more games at the same time plus signed record amount of 2nd and 3rd party deals, which also negatively affects their OI in a lower level in the short term, but making investments that years later (to build a team and make AAA titles take many years) will pay out generating higher revenue and OI. Soonish these investments should start to pay out.
In recent years they also did cut the fat of underperforming / less promising stuff cancelling some games, shutting down a few studios and firing like 1000 people, which also should improve the OI.
Sony will consistently improving their OI, specially as they keep releasing new PC ports, successful GaaS and movie/tv show adaptations (and in the future mobile games) since they have a way higher ROI than the average SP AAA console only release.
One of their main goals of the mid-term (3 years period started last month) plan is to improve their OI. At it may be one of the reasons of why they'd want to keep a low profile with new acquisitions: they'd want to complete the payments of the previous ones before investing in new ones without negatively affecting their OI.
Same goes with the amount of projects under development: they have a record amount of 1st party games under development, many of them from new teams (including both created internally or acquired). So maybe they may want to wait to release several of the ones they have under development at the new teams before creating or acquiring more teams, in order to to keep improving their OI.
And then there's the part of improving their PC side: a Sony PC store they could release in the mid term would increase the OI from their PC stuff, which in case of the ports of old games already have a huge ROI and even the ports smallest stuff like Sackboy or Ratchet became profitable, so they could try to continue porting even old stuff that didn't have good sales.
And well, their userbase will continue growing thanks to many things, including to make their brands more popular thanks to movie/tv shows, PC ports, mobile game, etc.
They are working in many ways to improve their OI and have potential to make more, so make sure it will keep improving.
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