Sony reportedly plans to ship out lesser units of its upcoming PlayStation 5 console compared to when it first launched its predecessor.
The company is rumored to be making fewer than 6 million units for its first year. For comparison, Sony sold 7.5 million units of the PS4 in just its first two quarters.
One might think the reason for having fewer units is because of the current pandemic, though that isn’t the case.
Its production capacity remains unchanged, though the pandemic has disrupted Sony’s promotional plans.
In fact, the reason for lesser units is reportedly due to the high cost. Components needed to build a PS5 unit isn’t easy to come by, so it turns costly.
This would impact demand negatively as a result. Game developers expect the PS5 to cost anywhere between $499 to $549.
Sony’s strategy is reportedly to continue relying on its PS4 to bring in more users to its platform while the PS5 is in limited supply.
Sony is currently selling the PS4 for $300, while the PS4 Pro is selling for $400. Once PS5 launches, Sony will reduce prices for both consoles to draw more users to its PlayStation Plus and PlayStation Now services.
As far as tactics go, it makes sense. Sony isn’t exactly relying on its hardware to make recurring revenue but rather its subscription services.
However, this doesn’t mean the PS5’s production is in the clear. Sony has made employees work from home too due to the pandemic.
Furthermore, its board has been unable to meet to approve business plans for the fiscal year. That includes business plans for the PlayStation unit, apparently meant to take place in March.
Sony may not hold a press conference to announce the PS5’s release date and price either, due to coronavirus fears.
Despite all that, Sony will still launch the PS5 in holiday 2020, as long as the Xbox Series X sticks to its release date.
Due to the intense competition between PlayStation and Xbox, especially in the U.S., some analysts predict that both companies may be forced to sell their new consoles at a loss.
Suppliers have already been delivering components for PS5’s assembly. Mass production for the console will reportedly begin in June.
Jim Ryan, Sony’s PlayStation chief, reportedly assured those in the supply chain that the console will launch simultaneously worlwide.