August 10, 2022
PS5 crunch: Sony told to reduce PlayStation 5 production outlook due to component, logistics constraints

Sony has downgraded its PlayStation 5 production outlook for this fiscal year due to component and logistics constraints, according to people familiar with its operations.

The Tokyo-based entertainment giant had previously targeted more than 16 million units assembled in the year ending March, setting it to achieve its sales target for the period and a head start on the subsequent year’s production. Did it too. The company has now reduced that number to about 15 million, making it difficult to target 14.8 million PS5 sales by March, the people said, asking not to be named because the information is not public.

Logistics issues and parts shortages have become more serious for Sony, Chief Financial Officer Hiroki Totoki told investors on a conference call late last month. PS5 sales in the quarter ended September were slightly weaker than expectations, he said on October 28, having previously warned that any resurgence in the spread of COVID-19 could impact the company’s supply of components. The PlayStation 5 became the fastest Sony console to reach 10 million units sold this July, but it has since lagged behind the sales momentum of its predecessor, the PlayStation 4.

The PS5, released a year ago, has been difficult to find for the entire duration of its time on the market, largely constrained by Sony’s struggle to get enough units distributed globally. Uneven vaccine rollouts in developing countries where Sony’s suppliers have their own production bases have made the supply of chips and parts unpredictable. People said assembly partners are in daily contact with component manufacturers to confirm that shipments will arrive on schedule, which is not always the case.

Sony did not respond to a request for comment.

Components in short supply include unremarkable but essential gear such as power management chips. Toshiba’s chipmaker, which provides such power chips to Taiwan Semiconductor Manufacturing Company, has warned that manufacturing conditions are unlikely to return to normal even during 2022.

Sony is far from alone in its struggle to navigate a clear path through the shortfall. Rival Nintendo cut its full-year sales forecast for the Switch console family by 1.5 million units in early November, while Bellevue, Washington-based Valve cut its Steam Deck Portable from December to February, citing global supply chain issues. Pushed back the start of the console.

There is growing frustration among game makers as well as fans of the console about Sony’s limited inventory. A top Japanese game publisher has found players who used to buy PlayStation versions of its games are now slowly shifting to buying PC versions, said an executive who did not wish to be named. PlayStation 5 games have so far failed to make an impact on the Japanese sales charts, which are dominated by Nintendo’s Switch platform, data from market tracker Famitsu shows.

Sony’s manufacturing partners expect the PlayStation 5 to be in tight supply through 2022 and said it would be challenging to produce enough units to achieve the company’s 22.6 million sales target in the next fiscal year.

PS5 vs Xbox Series X: Which is the best “next-gen” console in India? We discussed this on the Orbital, Gadgets 360 podcast. orbital is available Apple Podcasts, google podcasts, SpotifyAnd wherever you get your podcasts.

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