PlayStation 5 Distribution Problem Set to Continue in 2022
PlayStation 5 was one of the most highly anticipated gaming consoles in history. Millions of people were looking forward to ordering and getting their hands on the new device. It was announced in 2019 and on November 12, 2020, the PS5 was officially released in several countries, including the USA, Canada, Australia, Japan and South Korea. A week later, its global distribution began.
Logically, the interest in purchasing the console was extremely high and many people pre-ordered it. The number of gamers that were interested in the PS5 was actually a lot bigger than anticipated and hence, developers faced a major problem – they weren’t able to keep up with the demand and the PS5 distribution dropped massively.
There Were Several Reasons As To Why PS5 Faced Shortage in Production
Logically, the first problem is that Sony did not anticipate the pre-order interest in the console to be that high. So, it was caught off guard. To make things even worse, countless people ordered the PS5 after it hit the market.
Just when Sony thought that the situation will be under control, COVID-19 became a major issue and it changed our lives. Due to the restrictions, Sony was unable to keep up with the production and hence, the PS5 shortage was even bigger.
As people got used to the principle of staying and working from home, they sought various activities that can help them have fun. One of the most common solutions was ordering a PS5 and playing games. Millions of people resorted to ordering PS5s and Sony was faced with another challenge.
Scalpers made things worse as they purchased several consoles and started re-selling them at a higher price. Sony anticipated that it has enough hardware to ship over 22 million units by the end of 2022, however, the number dropped to 15 million in November.
As a partial solution, Sony continued producing the PS4 even though it planned to stop its production as a way to make up for the PS5 shortage. At the end of May 2022, the company announced that it sold 20 million PS5 units.
Sony’s Production Issues Will Continue
The current problem that Sony is facing is the fact that there’s a massive computer chip shortage across the world. However, the CEO of Sony Interactive Entertainment, Jim Ryan, stated that the company is looking to boost production during an investor briefing.
He stated that even though China’s zero-COVID policy, which includes lockdowns continues to create problems, things are improving. There are both good and bad news concerning the boost in production, which was outlined by both Ryan and the executive deputy president and CFO of Sony, Hiroki Totoki.
Starting with the good news, Sony expects to produce around 18 million units for the fiscal year, which ends in March 2023. According to the earnings report by the company, that is more than a 60% increase compared to the number of units that were produced and sold in the previous fiscal year.
However, as Totoki stated during the investor briefing, the demand is higher than 18 million units. He went on to say that if the question is whether the company can keep up with the pace, he thinks that it is “still short somewhat.”
Totoki also added that in terms of providing customers with PlayStation units in a smooth and timely manner, the company is also falling behind.
Production Shortage is an Industry-Wide Problem, But Some Have a Different Solution
Sony’s PlayStation is not the only console that faces issues concerning production and distribution shortages. Microsoft’s Xbox also faced the same issues as the demand for Xbox consoles was far greater than what the company was able to produce.
However, Microsoft has recently re-stocked stores with its units and the box of the company, Phil Spencer, stated that the company put a lot of effort into making sure that consoles are moved from point A to point B and that it has secured chips. That is the reason why Spencer stated that the supply of the company is in a stable position.
Rumours paint a different picture though. Many people have stated that Microsoft pays for priority at development companies, which is why it can keep up with the market’s demands. The co-founder of XboxEra, Nick ‘Shpeshal’ Baker, stated that Microsoft has learned from its past mistakes and hence, it decided to pay “to be able to increase their production.”
Baker added that he thinks that this is a smart move because if the company wants more subscribers on Game Pass, it won’t be able to gain them if it doesn’t provide its customers with gaming consoles.
Thanks to this fact, Xbox was able to outsell PlayStation in the UK during Christmas and in Europe in February. This wasn’t the result of Xbox being more popular than PlayStation, it’s because Xbox Series X/S was far easier to get than the PS5.
Finally, according to GSD data, around 290,000 game consoles were sold in April 2022 across Europe, which is a 15% drop compared to March. However, it is worth noting that the data includes selected markets and countries such as the UK and Germany are not included. The top 10 games (digital and physical) for April were:
- Lego Star Wars: The Skywalker Saga
- Elden Ring
- Pokémon Legends: Arceus
- Grand Turismo 7
- Kirby and the Forgotten Land
- GTA 5
- FIFA 22
- Nintendo Switch Sports
- Mario Kart 8: Deluxe
- Horizon Forbidden West
The top 20 list was concluded by WWE 2K22, Minecraft: Switch Edition, Red Dead Redemption 2, NBA 2K22, Mario Party Superstars, The Last of Us: Part 2, F1 2021 Big Brain Academy: Brain vs Brain, Call of Duty: Vanguard and Football Manager 2022.
