Hi, I'm Hideaki Nishino, President and CEO of Sony Interactive Entertainment, and the CEO of the Platform Business.
Hello, I'm Hermen Hulst , CEO of the Studio Business.
Hermen, and I am pleased to be here today to discuss the PlayStation business and to update you on our current momentum and strategic direction. PlayStation has been defining the gaming industry for the past three decades. The PlayStation brand is universally celebrated by both players and creators for the unique experiences we create. From the first PlayStation released in 1994 to the PlayStation 5, we have demonstrated our commitment to innovation and supporting a diverse range of content from both third-party creators and our own PlayStation Studios. And we are excited to continue pushing the boundaries of play to serve the PlayStation community and to grow new audiences. Over these past three decades, we have grown our business at an incredible rate. The current generation with the PlayStation 5 has already become the largest in terms of the total sales and operating income.
Our financial profile continues to evolve as the overall business has scaled. Sony Group's theme for the Fifth Mid-Range Plan is "Beyond the Boundaries" to maximize synergies across the group. SIE's theme is "Console and Beyond." We are building on the strengths of the PlayStation Platform and PlayStation Studios, broadening our reach, audience, and the value we create for players and creators. We have established a leading position in this console generation, and we are now focused on capitalizing on this momentum by driving greater profitability and investing thoughtfully. Let me take a brief moment to summarize what the PlayStation experience means. PlayStation is an experience and a community who shares excitement. Our role is to connect players and game creators. We want to provide the players with the best gaming experience possible, and that means enabling creators to provide players with these amazing experiences.
Fulfilling this commitment enables us to serve 124 million players with access to over 12,000 games. As more players come to PlayStation, more creators do too, which attracts more players, and so on. This positive feedback loop has attracted over 4,000 creators to our platform, from the largest publishers to the smallest indie studios. All of this is showcased by PlayStation Studios. Through our studios, we have built world-class franchises and beloved characters. Year after year, we provided fans with niche narrative experiences and live service titles that demonstrate our obsession with quality, confirming that PlayStation is the best place to play. And we continue to explore new ways to connect players and new audiences to these franchises through games and other media on console and beyond.
The platform and studio businesses are the organizational pillars that allow us to deliver for players and creators, tightly interconnected components which have each powered our success and are fundamental for us to continue executing successfully. Now turning to the platform business. The PlayStation console is the gateway to a lifetime of player engagement and value, a deep and diverse library of first and third-party content, a valuable and compelling subscription service, and peripherals that enhance the experience. Our platform is stronger than ever. We continue to attract more players, and we now have over 124 million monthly active users. Through the wide range of content and services we provide, these players are more engaged than ever, which has resulted in record-high gameplay hours. Our platform is also more accessible than ever.
The PlayStation 5 offers the best way for players to experience our content, and as such, this player base has continued to grow. These players are highly engaged, spending more on the content and services than in prior generations. However, the PlayStation 4 remains an important access point for existing players to experience our content and services, and we remain committed to serving them. Content and services provide a consistent and predictable base of revenue and now represent over 2/3 of total revenue. This includes the PlayStation Store, with a range of content, including ongoing franchises and new hits, and PlayStation Plus, which provides profitable and recurring subscription-based revenue. The store business has a balanced portfolio of content with diverse characteristics. Major, ongoing franchises consistently make up about half of this revenue, comprised of live service titles and annual releases.
But we also support a wide range of creators, which resulted in a collection of over 12,000 titles, powering the rest of our store revenue and capturing breakout successes such as 2024's Black Myth: Wukong. Complementing this is the PlayStation Plus, which provides recurring subscription-based revenue. We are focused on driving profitable growth by increasing engagement and appeal, and by continuously improving the service proposition and the content that we offer players and subscribers. As a result, subscribers are increasingly choosing our Premium and Extra tiers, which now represent approximately 38% of total subscribers. Peripherals enhance the PlayStation experience. Through innovation in our lineup for peripherals, as well as third-party partnership, we are providing new ways for players to play. This includes the Portal, which provides an additional access point to the PlayStation platform. Additionally, we are intensifying players' connection to our brand through customization and special edition designs.
To celebrate our 30th year anniversary, we released a limited edition lineup of consoles and peripherals that honor the PlayStation launch in 1994, and these have been hugely popular with nostalgic fans. Underpinning the platform business is a strong focus on operational excellence. Our supply chain is geographically diverse, and we manage it strategically to meet the demands efficiently. Content distribution is an area where we are continuously investing in and exploring new ways to enhance player personalization, content discovery, and pricing optimization. Our player and creator services remain our key strengths, supporting our commitment to being the best place to play and publish. These areas are core to our ecosystem health and ensure we are well-positioned for the future. To wrap up on the platform business, we have established a strong foundation for the future, reaching record levels of players and engagement.
We are now focused on capitalizing on this current momentum and continuing to drive monetization on content, services, and peripherals. I will now pass it to Hermen to discuss the Studio Business.
Thank you, Hideaki Nishino-san. To accomplish the studio business's goal of consistent and profitable growth, we are focused on three key strategic pillars. First, we are continuing to advance our creative leadership in single-player, delivering the experiences players have come to expect from our studios. Second, we are establishing a diverse base of live services, broadening our business model and capabilities. Third, we are capitalizing on our strengths as an IP powerhouse, creating new IP, cultivating the potential of our gaming franchises, and unlocking new areas of growth beyond gaming. Across all of this is a strong focus on efficiency and reliability in our development and delivery processes. PlayStation Studios is a global network of exceptional teams across North America, Europe, and Japan. Each studio specializes in delivering category-defining content for our players.
We continue to refine and develop this portfolio to achieve our strategic goals and recently announced the formation of two new studios, Dark Outlaw Games and team LFG, further illustrating our commitment to innovation and growth. Our single-player titles consistently deliver world-class narrative experiences that resonate with millions of players around the world. These are our core strength, providing a base of recurring revenue through consistent annual releases. We've proven this year over year with our tentpole releases and are continuing to do so with our pipeline of upcoming titles: Ghost of Yotei and Death Stranding 2: On The Beach in fiscal year 2025, and future releases of Intergalactic: The Heretic Prophet and Marvel's Wolverine. I'd like to spotlight one of our most exciting recent successes and one of our most anticipated upcoming titles.
Released last fall and created by Team Asobi, Astro Bot was a smash hit, achieving universal acclaim among players and critics and sweeping industry award shows. Players of all ages platformed through a rich world inspired by PlayStation's storied history as they saved over 300 bots across the universe. Looking forward, Ghost of Yotei, the latest installment in Sucker Punch's flagship Ghost franchise, will bring players to the wild and beautiful plains of Hokkaido this October. This title is expected to build on the success of its predecessor, Ghost of Tsushima, which sold over 13 million copies and captured the imagination of players around the world. We also remain committed to building a diverse and resilient portfolio of live service titles. MLB The Show, Destiny 2, and Helldivers 2 have established enduring player communities and provide a strong base for our ambitions in this category.
We are building on these successes, leveraging key learnings as we look to the future to further refine our capabilities. We look forward to further showcasing our progress with Marathon, our new title from Bungie. With all of these titles, we are engaging players year after year, providing ongoing content and experiences, creating a recurring base of revenue, and further fortifying our business for the future. I'd like to spotlight two examples of our live services strategy in action. Helldivers 2 from Arrowhead Game Studios has been a resounding critical and commercial success. In addition to winning multiple industry awards, the game has sustained a healthy community of engaged players over a year post-launch with the majority of these players on PC. The December Omens of Tyranny update further evidences our ongoing commitment to driving the game's success and delighting players for years to come.
We are also very excited for Bungie's upcoming title, Marathon, an innovative and bold take on the extraction shooter genre. We expect to build on the success of these titles and further grow our capabilities in live services. Finally, let's turn to our third pillar, franchise and IP expansion. We have a long and proud history of not only creating iconic games, but also growing these into iconic game franchises with enduring fan bases. Each of these franchises has over 2 billion hours of engagement each over their lifetime. This track record speaks to our commitment to cultivating franchises through thoughtful release cadences that meet player demand while also fostering longevity. But we also remain committed to investing in new IP and believe that our pipeline of new and emerging IP has the potential to graduate into similarly enduring and resonant franchises.
Ensuring our franchises also resonate beyond gaming is also a key priority. By bringing intentionality to how we do this, we strengthen our franchises and increase their lasting revenue. We have a proven track record of expansion into film, TV, and other formats and have leveraged our IP effectively to deepen and expand engagement. We remain dedicated to staying true to the stories, the worlds, the characters of our games, while adapting the content to suit new mediums and appeal to broader audiences, and we are thoughtfully driving into new opportunities, including merchandise, to further deepen fans' connections with these franchises. The Emmy Award-winning HBO series The Last of Us is an excellent example of our franchise expansion efforts in action. The Last of Us returned in April with Season Two premiere outperforming the Season One premiere's impressive viewership numbers.
The show continues to cement itself as a cultural phenomenon and has already been renewed for a third season. We're also very excited to bring the hit action comedy series Twisted Metal back to Peacock this summer. The first season introduced the Twisted Metal franchise to new audiences around the world, and the second season is expected to take audiences for another high-octane ride. Central to all of this and our objectives is a clear focus on operational excellence. Our portfolio management framework enables us to balance risk and return by carefully evaluating each title's potential to contribute to overall business goals. Our development and testing framework ensures ongoing oversight of every title, continuously validating and revalidating our creative development and commercial assumptions and adjusting as necessary to ensure titles remain on track.
Finally, we have a balanced operational footprint consisting of our global network of studios and external and outsourcing partners, complemented by central functions and processes. This rigor allows us to deliver amazing games that exceed player expectations consistently, reliably, and efficiently. In conclusion, the studio business is in an incredibly strong position. We have advanced our position as leaders in the single-player space and established a strong foundation for our live services strategy. Our focus is now on building on this success. We will do so by continuing to deliver incredible experiences in single-player and live services while also expanding our franchises beyond the console and beyond gaming, all while maintaining the operational and financial discipline and future-facing investment mindset required to drive sustainable profit and long-term growth.
Thank you, Hermen. PlayStation has been evolving play for the past 30 years, and we continue to invest in expanding our audience, deepening engagement, and enhancing experiences. We are exploring new ways for players to access our content and services. The cloud streaming beta on the Portal, which was announced last November, allows players to play games directly from our servers without PlayStation 5 console. Additionally, we are continuing to bring major PlayStation Studios franchises to PC. We are also investing thoughtfully in key technology areas, including cloud and artificial intelligence, to enhance player and creator experiences and to drive further enterprise-wide efficiencies. Collaboration with Sony Group is a differentiating advantage for PlayStation. The success of The Last of Us and Twisted Metal with Sony Pictures are excellent examples, and we are also excited to be partnering with Crunchyroll on the recently announced Ghost of Tsushima Legends anime.
Geographic expansion is another key area, and the Middle East and North Africa Hero Project launched last summer, alongside existing programs in India and China, are helping us tap into this regional growth. Finally, as we evolve and innovate, we are leveraging the collective expertise of Sony Group and collaborating on the strategic investments. One example of this is the new Sony Group engagement platform to connect users and creators, building on PlayStation Network's core backend functions such as payment, data infrastructure, and security. Another area where we are making a significant impact across Sony Group is in environmental, social, and governance. We remain committed to driving forward environmental efficiency, safety and accessibility, and community engagement. These initiatives not only enable us to lead the way with responsible growth, but also positively reinforce our brand values to our players and creators.
Fiscal Year 2024 was a strong year for us with $30.7 billion in sales and $2.7 billion in operating income. The platform business has never been stronger, and the studio business continues to deliver engaging experiences for players. As we enter the second half of the Fifth Mid-Range Plan, we are now focused on capitalizing on this momentum and driving operating income. Hermen and I are extremely proud of the strengths of the business.
This is an incredibly exciting time for PlayStation. We have established a solid foundation from which we expect to continue driving sustainable, profitable growth.
We will continue to inspire our players and creators, pushing the boundaries of play with imagination. This concludes our presentation. Thank you.
Hello everyone. Thank you very much for being with us today. I'm Justin Hill, SVP of Finance and Investor Relations at Sony Corporation of America. I'm joined by Nishino-s an and Hermen, who had great presentations today. Thank you very much. Very informative. I'm also joined by Lynn Azar, who is SVP of Finance and Corporate Development here at Sony Interactive Entertainment, so thank you for joining us, Lynn. I have a number of questions I'd like to get to today. I'm going to start with the platform business. As Sony Interactive Entertainment and the industry as a whole move towards multi-platform gaming, how will you protect the value of the PlayStation console?
The PlayStation experience is not just about the gaming console hardware, nor is it not just about the content as well. It's an experience and a community that shares this excitement. For over 30 years in the past, we've been committed to being the best place to play and publish. And this has helped us establish a dedicated community of 124 million players and an invaluable network of over 4,000 creators. PlayStation console experience is designed to enable immediate gameplay in an immersive and accessible way. We're doing this in a completely integrated way, designing and manufacturing all aspects from the chips to the backend system. And we continue to look for new and innovative ways to broaden our reach and bring our content and service to the players.
The value of the PlayStation console is that it's still the best place to play, and it's growing as we reach an even broader audience.
You're quite right that we're continuously exploring new ways for players to interact with their franchises. It's important to realize that we're really thoughtful about bringing our franchises off console to reach new audiences and that we're taking a very measured, a very deliberate approach in doing that. Particularly on the single-player side, our tentpole titles, they're such a differentiated point of differentiation, I should say, for the PlayStation console. They're real showcases of the performance, of the quality of the hardware. So we want to ensure that players get the best experience from these titles. We're very thoughtful about how and if and how we bring these titles to other platforms.
And then we need to constantly understand the players' patterns and the behaviors and ensure that we serve them appropriately. Hermen and myself are very, very focused on this and then investing as needed to evolve the PlayStation experience.
With cloud gaming more of a viable option than ever before, do we need a next-generation console? Is SIE developing one?
It's a great question. We have been cloud gaming for over the last 11 years. We deployed cloud gaming servers to support the PS3, PS4, and the PS5 generations, and then we are really proud about the quality we have been delivering. Cloud streaming to the PlayStation Plus Premium and the other cloud streaming beta on the PlayStation Portal is the one such way we are doing this. However, the business model for cloud gaming must be sustainable for the longer-term growth. Cloud gaming is progressing well from a technical standpoint, as we have demonstrated with these offerings, but end-to-end network stability is not in our control, and the higher cost per playtime compared to the traditional console model remain as a challenge. Cloud gaming is increasingly providing an additional option for players to access content.
Our belief is that the majority of players continue to kind of want to play, experience the gaming through a local execution without dependency on network conditions. PS5 and PS5 Pro have validated this thesis, I believe. Our console business has evolved into a multi-faceted platform, and we now have a large ecosystem of highly engaged players across both the PlayStation 5 and the PlayStation 4 generations. Naturally, therefore, there's a huge interest in our next-generation console strategy. While we cannot share further details at this stage, the future of the platform is top of mind. We are committed to exploring a new and enhanced way for players to engage with our content and services.
Typically, when we launch a new next-generation console, operating income amount and segment margin declines in the year of launch. Should investors expect the same thing to happen if we launch a next-generation console in the future?
As Nishino-san mentioned, we're still exploring what the future of our platform would look like. Therefore, while we cannot provide any further guidance on operating income in future years, I would like to reemphasize that our financial profile as a business has evolved in line with our strategy. We've reduced traditional cyclicality, as you describe it, by establishing a large ecosystem of players across both the PS5 and PS4 generations, which provides recurring revenues. This has driven overall high and stable level of spend on content and services, which, by the way, now constitute over two-thirds of our revenue, providing a consistent, predictable, and profitable base of our revenue. PS5 represents our most engaged players with the highest spend per player versus prior generations. But our PS4 players as well are still active and spending as well.
So by providing players with increasing options of how to access the platform, we're able to better target the different play patterns and monetization profiles of different customer segments. And as we continue to drive a multi-generational ecosystem into the future, we'll provide new ways for players to access the platform and experience our content and services.
If the world does move to cloud gaming, what will the impact be on the PlayStation business? And what will be the impact on the PlayStation Store's take rate?
So I see cloud gaming as one of many ways to access content. However, regardless of access, we have many sustainable advantages in our business in the store. So on our customer side, our first-party exclusive titles enhance our catalog of great third-party content, which keeps players engaging and returning, right? And many of our players subscribe to Plus, which also keeps players coming back. Regardless of access, we look to provide a great experience for players through whatever device they're using to consume the content. And this commitment has allowed us to build a large and curated audience of dedicated and highly engaged players. This ensures that we are the best channel for creators to reach players. Additionally, we provide creators with tools and services to better market and monetize their games.
So again, over 30 years, we have developed very deep relationships and an understanding of creator needs that allow us to continuously stay ahead on innovation and services. The 4,000 creators, which I talked about, of all sizes and types that we have relationships with and the dedicated partner organization that serves them gives us a constant insight into their needs and how to provide ongoing value to them. All of those benefits remain for both players and creators, and it will provide continuing value even access mode change.
Many investors are speculating that Microsoft is moving away from the console. If that's true, is that good or bad for PlayStation?
So we think that competition in the business is healthy and then pushes us to innovate. There are multiple participants who together drive the overall game industry. And while there are new engagement models being explored, we ultimately think this is a good thing. However, as I mentioned earlier, we are confident and committed on our current strategy. And there isn't an urgent need for us to pivot, but we will continue to monitor play patterns and invest appropriately as required.
You raised the price of the PlayStation Plus in the past. What was the rationale for the price increase? And what might cause you to raise price in the future? Music and video streaming services are raising price consistently. How frequently can you raise the price of the PlayStation Plus?
Yeah, so PlayStation Plus is highly valued by our players and then continues to drive the engagement. We are already seeing a trend toward the adoption of higher tiers within our service, as evidenced by the subscriber mix we achieved in Fiscal Year 2024, where approximately 38% of players are now subscribed to a PlayStation Plus Premium or Extra Tier. That's higher tier. This is even after the global price increases we implemented in Fiscal Year 2023. More recently, the local price increases in the selected countries to improve our pricing strategy across certain market clusters and also to account for forex movements. These price increases were partly a result of the increasing value we bring to the players.
Through the quality and the diversity of content we continue to add, as well as investment in the features to improve the service further, such as player personalization and enhanced content discovery, PlayStation Plus service offers great value for our players, and we will continue to add more value and adjust our pricing strategy in a dynamic way to maximize the profitability.
What is the strategy around the PlayStation Portal? And are handhelds a part of your next-generation strategy?
Yeah, the PlayStation Portal is part of our strategy to offer more flexible play styles. When we invested in the PlayStation Portal, we wanted to ensure that any handheld device we create would be able to provide the players with the full PlayStation experience that they have come to expect through our consoles. We want to make sure our games look good when played on handhelds. The smartphone is too small a screen for high fidelity. So I wanted to approach portable gaming via streaming, which led to the PlayStation Portal. Currently, the Portal owners spend 30% more time playing and then later into the evening. It's showing the impact the Portal has had on the play patterns. Sales are progressing steadily, and then more importantly, it has unlocked additional engagement across our player base.
We remain committed to exploring new ways for players to access our content and services.
So now I'd like to move to the studio business. Totoki-san has said that the role of the PlayStation Studios has changed from that of a platform enabler and marketing tool to a profit growth driver. What has changed to increase profits?
That's a great question. SIE Studio Business is now both a creator and a publisher of world-class gaming experiences, all while driving sustainable, consistent growth. And we do that, as always, through innovation and creativity. And we're doing this by focusing on our three key strategic pillars. The first is continuing our leadership in single-player. Secondly, by building our capabilities and live services, and then also by growing our franchises into IP powerhouses. Another important part of our evolution is our increased emphasis on operational excellence. And we do that to underpin that approach of achieving profitable and sustainable growth. We've established very strong cost controls. We have much more rigorous budget oversight processes now in place. And we have also evolved our portfolio framework to enable making more informed choices and effectively balancing the profit potential with the associated risks that come with these opportunities.
We've also changed the way we support our studios through central services with more greater operational rigor, much more intentional kind of top-down approach to our portfolio, increased oversight of our development processes, and we have introduced some new ways of working that includes greater use of outsourcing, greater use of co-development, and a much greater integration of future-facing technology as well as data solutions into our workflows.
How committed are you to live game services? Are you going to invest as much capital into live game services as you originally planned?
Yeah, we remain very, very committed to building a diverse and a resilient live service portfolio. I mean, we have MLB The Show, Destiny 2, Helldivers 2. And these are all really good examples of the type of titles that we're looking to develop. These titles have already established an enduring player experience, a set of player experiences and communities across quite a wide range of different genres. And together, that provides a really good foundation for our ambitions in this category. I would say that additionally, we are continuing to invest in new live services, with Helldivers 2 providing such a great example of the level of success we can achieve if we get everything right. So that game has been a true breakout success. It's been attracting and retaining significant community and very engaged players since we launched that back in February of 2024.
This ongoing success, I think, is further evidenced in how we deal with the monetization. Microtransactions now in that game make up more than half of the revenue. We're also very excited about Marathon's anticipated launch in this fiscal year.
Great. Speaking of Marathon, what have you learned from your foray into live game services, including Concord? And how does this relate to Marathon and the recent Alpha test?
Yeah, so live service, we really see that as a great opportunity for us, but with this great opportunity are some unique challenges associated, so we've had, we talked about it, some early success as with Helldivers 2. We've also faced some challenges as with the release of Concord. I think some really good work actually went into that title, some really big effort, but ultimately, that title entered into a hyper-competitive segment of the market. I think it was insufficiently differentiated to be able to resonate with players, and so we have reviewed our processes in the light of this to deeply understand how and why that title failed to meet expectations and to ensure that we're not going to make the same mistakes again. As I said earlier, we've introduced much more rigorous processes for validating, for revalidating our creative, our commercial, our development assumptions and hypotheses.
We now do that on a much more ongoing basis. That's the plan that that will ensure that we're investing in the right opportunities at the right time, all while maintaining much more predictable timelines. For Marathon, it's our goal to release a very bold, very, very innovative and deeply engaging title. It's going to be the first new Bungie title in over a decade. We're really excited for that release. We're monitoring. We're going through the test cycles. We're monitoring the closed alpha cycle that the team has just gone through. We're taking all the lessons learned. We're using the capabilities that we've built in analytics and user testing to understand how audiences are engaging with the title. Some of that feedback, frankly, has been varied, but that's super useful. That's why you do these testings.
The constant testing and the constant revalidation of assumptions that we just talked about, to me, is just so valuable to iterate and to constantly improve the title. When launch comes, we're going to give the title the optimal chance of success. This cycle of test, of iterate, test again, that is such a key component of the live service success, both leading up to launch but also throughout the life of the game. We're committed to continuing to leverage our learnings to maximize engagement and player satisfaction throughout the life cycle of the title.
Great. What is your philosophy around creating IP? Is it a priority? And how do you ensure that it is differentiated?
At our core, we believe that great new IP originates from passionate teams with amazing ideas. And it's our job as leadership to create an environment, to foster an environment in which these teams can succeed. As leadership, we support them with the tools, the capabilities, the structures that they need to develop those ideas into successful new IP. So we recently formed, out of incubation, two new studios, Dark Outlaw Games and team LFG. And I think that kind of highlights further our commitment to the creation of new IP as well as to our approach to innovation. These two teams, they're new, but they are comprised of veteran developers from across all different pockets of the industry. Their vision and their ideas have blown me away and the passion behind it. I really and honestly cannot wait to help shepherd their projects into success.
Both by investing in strong, vision-led creative teams and by better leveraging, on the other hand side, data and understanding our portfolio, those two things together, we're now able to better explore new ideas and genres beyond the core competencies, and that helps us diversify our portfolio to appeal to new players everywhere.
I'd now like to turn to the business environment as a whole. Some investors, to be quite honest, are concerned that the improved specifications of the Switch 2 and Nintendo's improved relationships with third-party publishers will lead to tougher competition for PlayStation in the next few years. What do you think about those concerns?
Yeah, so we closely monitor the kind of overall gaming industry, including the action of other market participants. Additionally, catalysts in the market that are great for the industry as a whole, and then as they invigorate the excitement and the demand more broadly, so it's great to have people launching new things. However, as I mentioned previously, we have a differentiated strategy, so PlayStation 5 is designed for an immersive gaming experience, and this includes the innovative DualSense controller features as well. We believe PS5-level performance is required to achieve a great experience on big screens, and in this way, we have provided a unique offering for players and creators in this current console generation. However, publisher strategies are increasingly shifting towards being multi-platform, so more platforms can run the game, same game, which is great from a creator's perspective.
Among those platforms, our mission is that we will continue to be the best place to play and publish. As such, we have empowered our creators to leverage our offering and the services to create amazing, unique experience for players with high engagement and great monetization opportunities. We have done this consistently as the industry and the competitive dynamics have evolved, and of course, PlayStation Studios and our franchise have a special role in showcasing the PlayStation experience and then strengthening the players' relationship with us.
Some investors are also concerned that Nintendo's appeal to the younger generation could lead to market share declines for PlayStation if those younger users choose not to graduate to PlayStation as they age. What is Sony Interactive doing to increase its addressable market among younger users and its overall mix of users?
The PlayStation brand and offering has resonated with a wide range of players over three decades now, and the number of the users engaged on our platform continues to grow. By supporting such a large number of creators, we are able to provide the largest range of content available, catering to all demographics, geographics, and play styles, et cetera, so we believe that by constantly investing in players' relationship with the brand and our relationship with creators, we will ensure we stay close to all players' hearts through their lifetime.
Yeah, and so if I may add to that, on the first-party content side, we're also reaching to a greater range of audiences more directly, including younger players with our first-party lineup. In addition to our franchises with more, I would call that multi-generational fan bases such as Marvel's Spider-Man, we also have franchises that appeal to a range of different player segments. Horizon is a good example. It's been very popular with female players. Astro Bot from our lovely team is so big in Tokyo. It's been a hit with children and adults alike. So we also continue to drive engagement with the PlayStation ecosystem and brand by bringing our franchises to new formats: film, television, and anime. Anime in particular is appealing to key younger audiences. So that's going to be very helpful for us.
Artificial intelligence. What is the potential of artificial intelligence in the game industry, and how is it being used at Sony Interactive? Can it reduce costs when making games, developing next-generation consoles, or in corporate functions?
We are actively exploring and investing in AI and machine learning across the organization. Our near-term focus of these investments has been to increase productivity and support data-driven decisions. This includes areas such as PlayStation Store, Discovery, fraud management, and then general IT things. Additionally, we introduced Copilot and ChatGPT across the organization last year. The vast majority of users are now experiencing increased efficiencies as well. Longer term, we are exploring the new possibilities with using AI to enhance gaming experiences in the new ways for players. These initiatives are still early, but there are promising areas we are excited about.
Yeah. And on the studio side, we've been using AI, obviously, for quite a while, but we continue to explore the possibilities of AI within the studios, within game development, and how that can enhance creators' as well as players' experiences. To your question, I don't actually expect in the near future a dramatic reduction of the cost of game development. I think that'd be unfair to claim that. But I do see tremendous potential benefits in AI as a set of tools, suite of tools to further enable our developers. And we continue to explore use cases in that space. For example, there's potential for use in improving the quality of game characters, of backgrounds, animation, audio translation, real-time graphics, you name it, as well as potential applications in supporting live service content pipelines through much more opportunity to personalize the experience for individual users.
So overall, I think a huge range of impact.
Yeah. And then as we further explore AI, we recognize there are challenges associated with it as well, so including from talent and with respect to managing costs, right? So we will continue to be mindful as we look to integrate such technologies throughout our business.
I'd now like to turn to financials and KPIs. So Nishino-san and Hermen, what KPIs are you focusing on for each part of your businesses?
Hermen and I are focused on continuing to drive sustainable, profitable growth for SI as a whole. Accordingly, we have operating KPIs that we are constantly monitoring to support this. Having said that, as mentioned in the presentation, the PlayStation platform is as strong as it has ever been. We are largely focused on the KPIs that reflect the core pillars of our businesses: audience engagement and the monetization. We have achieved a record high numbers of monthly active users. This has been driven by the success of the PlayStation 5, but also by our strategy of providing additional ways for players to access our platform. Importantly, this strategy allows us to capture the value from different player bases, each with different monetization profiles.
So as a result, we have been able to achieve record high levels of engagement and spending on the content and the services.
Yeah, and so for the studio business, I would say that we're focused on quality, on timely delivery, engagement, and profitability. Of course, ongoing monetization as well. Back to those pillars I was talking about in single-player, we're focused on consistently delivering at least one tentpole title per year, the right time in the year, at the right quality level, which players have come to expect from PlayStation Studios. In live services, we're focused on building a recurring base of enduring live service titles that drive ongoing engagement and monetization as achieved by our releases to date. Then finally, we'll continue to grow our franchises through a very thoughtful release cadence and as transmedia properties.
You expect to increase operating income amount and margin percentage in fiscal year 2025 compared with fiscal year 2024. But can you further grow them in fiscal 2026? And if so, how do you intend to do so?
So starting by, the PlayStation business is in a very good position and has a very strong momentum. We expect to continue this momentum and remain optimistic about fiscal year 26 and beyond. So in particular, as we approach the second half of the MRP period, we expect an even higher level of our revenue to be from content and services, which will improve the overall profitability of the business. Our roadmap of first-party titles and the high expectations we have for the third-party titles will directly drive the business' natural operating leverage. Additionally, as we are focused on growing the PS Plus business profitably, continuing to drive subscriber growth in our Premium and Extra tiers. And finally, we expect the ongoing focus on operational excellence to translate into a positive impact on profitability.
So overall, we remain committed to contributing meaningfully to Sony Group's MRP target of operating profit CAGR of 10% or more and cumulative operating profit margin of 10% or more.
How do you expect the financial profile of your business to evolve over the long term?
So again, the business fundamentals are strong, and we expect this to continue across many key areas. First, strong sales growth driven by highly engaged and multi-generation MAU and then an increase in the PS Plus, we spoke about that, increase in PS Plus revenue due to the shift to the higher tier and also our price revision and then on the first-party live services, becoming more consistent, predictable, and growing revenue stream and also with the continued strength and reliable delivery of our tentpole titles, incremental revenue also generated by going off console with our first-party IP and finally, the strict cost management and the operational excellence we have in place. All of these are ongoing trends that we will, of course, continue to monitor and improve everywhere we can. I do expect these trends to continue going forward.
In closing, I'd like to turn to Nishino-san. As the new sole CEO of Sony Interactive Entertainment, what keeps you up at night? And conversely, what gets you the most excited?
For over 30 years, we have been pushing the boundaries of play. And my job is to make sure we continue this journey with players and the creators. The gaming industry is continuing to evolve. And then people's lifestyle continues to change over time. So we are seeing new play patterns and the behaviors, new market participants, and then new market segments as well. So that means we have new challenges and then new opportunities. We continue to connect the players and the creators through our products, content, and the services. It is an exciting yet challenging time for the overall industry with opportunities for the PlayStation experience to continue evolving. And we ensure we remain the best place to play and publish. So Hermen, Lynn, myself are focused on capitalizing on our current momentum, building on our strengths, and then driving profitable growth.
We also need to remain vigilant to our players and the creator needs to ensure we are listening to their feedback and investing appropriately in the relevant products, capabilities, and technology, and then I'm very confident and then excited to do so for many more years to come, so thank you very much.
Thank you very much. Thank all of you for your participation today, and thank you all for joining us.