The Tokyo Based Electronics Giant is pulling all strings to make its September 16 PS5 Showcase event a grand success. The event will witness the official reveal for Sony’s Playstation 5 as well as the Playstation 5 All-Digital Version. Along with price reveal for the next generation Sony consoles, tomorrow’s event will also showcase many highly anticipated third party games under development exclusive to the PS5. There might be a slight problem though. Chip woes regarding the SOC used in the PS5 console have forced Sony to bring down their manufacturing capacity. The result – there might be a high chance that the PS5 will be priced higher than initially expected.
You can thank the Coronavirus for this fiasco.
Sony Corporation has announced that they are cutting down manufacturing and production for the PS5 console by a margin of 4 Million Units. This brings down the total number of unites being produced for this year to around 11 Million Unites. The decision came in light of a major problem detected in the customized system on chip for the PS5 Console, according to sources familiar with the issue.
The Electronics conglomerate had revealed they had boosted production a few months ago in anticipation of higher demand for the PS5. The Holiday season is coming and with people spending more time inside their homes, business was supposed to remain booming for Sony’s PS5. The initial boost in production in July did not help meet Sony’s manufacturing targets as the global lock down sunk its teeth into its various facilities all over the world manufacturing multiple parts for the PS5 Console. Manufacturing issues dogged the PS5 production chain with the production yield for a particular SOC going as low as 50 per cent. Without the SOC – a crucial spare part for the PS5, Sony’s manufacturing hub took a hit. It affected their ability to properly produce as many units as they had originally targeted.
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According to sources, the production yield for the SOC is yet to become stable.
Analysts and experts were quick to point out that the reduction in output along with increased costs to keep operations running would force Sony to do the unthinkable. The PS5 would probably be priced higher than what was originally expected. This would affect Sony’s profit margins as well as our pockets. Sony’s PS5 is already facing stiff competition from rivals like Microsoft’s Xbox Series X and Xbox Series S. A further increase in costs will affect the overall price of Sony’s flagship console and bring down sales.
Sony’s immediate rival Microsoft Corporation revealed their flagship Microsoft Series X and Microsoft Series S gaming consoles. The Series X is priced at $499 while the Xbox Series S, with slightly less powerful hardware, is priced at $299. The highly competitive and aggressive pricing had already put a lot of pressure on Sony, which had reportedly decided to reduce the PS5 price tag as a counter-measure. The manufacturing woes for the PS5 were compounded due to the global pandemic scenario. Sony was already making do with a house of cards.
The wolf finally blew the little pig’s house away. The PS5 Production Line being hit was an inevitable scenario. But it is the magnitude and scale that worries us. In the end, the one that will have to shell out a bit more money will be us, the customers.
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Scheduled for Tomorrow, the Sony PS5 Launch Event will see the Electronics Giant reveal the price for the PS5 and PS5 All-Digital Version. According to rumors, the Regular Model will be priced at $449 while the All-Digital Version, which will not have the 4k disc drive, will be priced at around $400.
Sony’s worries just compounded when Nintendo announced their plans for an upgraded Nintendo Switch. The new Switch will have a new 4k output and more powerful components. Set to be accompanied by a flurry of new exclusive Nintendo Switch games, the hand-held console will eat away at the customer bases of Sony and Microsoft. Things are about to take an interesting turn in the world of gaming.
Stay tuned!!
Source: Bloomberg
