Sony announced its quarterly earnings for the first quarter of the financial year — ending June — on Tuesday. The multinational corporation reported an 80.9 billion yen (around $735 million) profit for the April-June period, a jump of 59.8 billion ($543 million) year-on-year, owing to brisk PlayStation 4 and camera business.

“PS4 continues to grow which allows them to sell more games, while recurring revenue from their PlayStation Network is hitting full stride,” Kiyoto Utsumi, an analyst at Japanese securities analyst firm Tachibana Securities Co., told MyBroadband.

Read: PS4 Pro vs. PlayStation 4: 20% Of Sales Are For New Console, Sony Says

Sony’s game and network division, which covers the PlayStation business, recorded a revenue growth of 5.4 percent year-on-year.

What’s surprising is the PS4 shipments are actually declining as the gaming console series ages. However, the company is leveraging the PS4 game and services such as the PlayStation network. Sony expects to ship 18 million PS4 gaming consoles this year compared to 20 million consoles sold in 2016.

While Sony’s PlayStation has been faring better than rival Microsoft’s Xbox, things may change soon. Microsoft has already revealed the next generation of its console, Xbox One X; but Sony is yet to reveal PlayStation 5.

Sony has been giving discounts on PS4, and it has also come out with the PlayStation VR headset. While the former is ahead of Microsoft in terms of technology that it employs in its commercial offerings, VR may not necessarily push it ahead of the competitors.

Xbox One X is a much more powerful console that supports 4K and even 6K graphics for some games, since it is equipped with better hardware such as 12GB DDR5 RAM. The device is an alternative to high-end gaming PCs such as Alienware. But the PlayStation line up currently has no offerings to match the features.

Sony has been reinventing the PS4 by offering consoles such as the PS4 Slim, but a new generation of PlayStation devices has been due for long.

Read: PS5 Release Date: Sony's PlayStation 5 Will Probably Launch In 2019, Analyst Says

The company is expected to launch PlayStation 5 next year, according to Trusted Reviews, but it is likely the launch may get pushed to 2019. Instead of trying to be a first mover like Microsoft, Sony has opted for a different strategy — it is actually waiting for 4K displays to become more common.

With their upcoming offerings, both the companies are eyeing hardcore gamers, who have been, until now more interested in gaming PCs due to their power and graphics playback capabilities. While Sony is concentrating on hardware offerings that are compatible with its software services, Microsoft is pushing towards hardware offerings that can make high-end gaming more accessible. Only time will tell which strategy will work.