PS5 Will Be Limited At Launch
If you were hoping to get a PlayStation 5 when it is finally released, you may want to preorder it when you can. Bloomberg is reporting that sources close to Sony is expecting a much smaller production run of the new console than everyone may have anticipated.
According to Bloomberg's sources, the initial product run for the PlayStation 5 will be around 5 to 6 million units for the first fiscal year. To put this in perspective, Bloomberg notes that Sony sold 7.5 million PlayStation 4 units within just the first two quarters after that console was released. There are a few different reasons why this may be happening, so let's break down what we know and compare it to the information provided by Bloomberg's source.
It would certainly be easy to pin these production slowdowns on the ongoing outbreak of COVID-19, which has had a massive impact on the gaming industry. However, it appears that this is not the case. According to Bloomberg's anonymous sources, only the marketing side of the PlayStation 5's release has been affected. Production and manufacturing continues on as normal, which means that the decision to narrow down the number of units produced is unrelated to the outbreak.
So the real reason behind the smaller number of produced units appears to come down to cost. This actually lines up pretty closely with what we've heard before regarding the PS5's production woes. The materials used in production are reportedly more expensive and much more scarce than what Sony has used in past generation consoles, which is expected to drive up the price considerably. Analysts expect that Sony will have to sell the console for at least $450, if not more, to break even.
It is very possible that Sony will have to find ways of marketing the new system strictly online and through social media. With the ongoing outbreak, the odds of the company holding any kind of press conference open to the public are slim. This means no one in the press is likely to get a hands-on look at the current build of the PlayStation 5 until right at launch.
If Bloomberg's sources are to the believed, we are already seeing the effects of the outbreak on Sony's PlayStation 5 marketing plans — and no, we're not just talking about the painfully dry PS5 spec presentation from a few weeks back. The impact on Sony's marketing plan can be seen in the recent unveiling of the PlayStation 5's DualSense controller. Bloomberg reports that Sony "was forced to reveal its DualSense PS5 controller in a hurried fashion, according to people informed on the matter."
Granted, the reveal of the DualSense has garnered quite a bit of press for Sony and it's upcoming system. When BossLogic is making memes inspired by your hardware, then you must be doing something right. Still, that's only a small piece of a much larger puzzle. Consumers still don't know a whole lot about what to expect from the PS5. Now there's the potential for many consumers to not even get their hands on it.
Granted, 5 million units is still a lot, and there's the possibility that Sony is expecting less people to be able to actually afford the console. A lot of folks are out of a job or on leave while businesses are closed due to the pandemic. Combining this with the expected high cost of the console, Sony may simply be trying to play it safe. It will already be difficult for the company to break even with these consoles, so the smaller production run could be Sony's way of ensuring that it doesn't make more than necessary.
It should be noted that Bloomberg's sources believe Sony has a separate plan for folks who don't go in for the PlayStation 5. In an effort to continue growing its customer base, Sony is expected to considerably cut the price of the PlayStation 4 and PS4 Pro. Bloomberg's sources implied that Sony "may cut these prices around the time of the PS5 launch to stimulate new subscribers for the PlayStation Plus membership program and PlayStation Now game-streaming service."
All of this adds up to a pretty clear picture that the PlayStation 5 launch will not be at the same scale as previous console generations. Whether or not this means that Sony is simply playing it safe and will widen the release after the first year remains to be seen.
Sony has thus far declined to comment on any of this, but it's unlikely the company will stay silent on this for very long. Again, the new console is meant to arrive this holiday season. It wouldn't come as much of a surprise to hear something more concrete in the near future.