Sony and Microsoft are gearing up to battle for game platform supremacy with the PlayStation 5 and Xbox Series X, and this is an unusual time to do it. With the ongoing COVID-19 pandemic, people are spending more time than ever alone in dark rooms where some games can really come in handy. Determined to avoid another PS3-style console shortage, Sony has reportedly ramped up PS5 production.
As recently as several weeks ago, analysts believed Sony was on-track to produce about six million consoles for the late 2020 launch. Today, Nekkei says Sony’s new target is 9 million, and Bloomberg believes 10 million is more accurate. So, we’re looking at a roughly 50 percent boost in production. Both publications agree that increased demand from quarantining gamers is the driving force behind the move.
If these numbers are correct, Sony could be looking at a huge launch success even if there are ample units left on the shelves after holiday shopping tapers off. Sony reported just 4.2 million sales in 2013 when the PlayStation 4 launched. It has since passed 100 million sales globally. Microsoft, by comparison, moved just 2 million Xbox One units.
Sony most likely sees this as an opportunity to get more people invested in its next-generation console. Microsoft will also be pitching the Series X hard this holiday season. If more people than usual buy consoles to stave off quarantine boredom, they’re likely to buy the occasional game in the next few years. It’s not uncommon for console hardware to earn very little (or even zero) profit. It can be worth taking a hit on the console to get people buying those high-margin games.
Gaming products, in general, have been in higher demand during the pandemic. Coming off a huge 2019 holiday season, Oculus has been unable to keep its VR headsets in stock for more than a few days at a time. Meanwhile, the Nintendo Switch was in such short supply this spring that third-party resellers were selling them above retail price.
Speaking of price, we still don’t know how much the PS5 or Xbox Series X will cost. Sony and Microsoft seem to be locked in a game of chicken — neither one wants to announce pricing first and give the other company a chance to undercut them and win the news cycle. Someone’s going to have to crack eventually.
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