PlayStation 5 Will Remain in Short Supply Till Next Year, Warns Sony

PS5 supply wouldn’t be able to catch up with the demand, Chief Financial Officer Hiroki Totoki reportedly said at a briefing.

By Takashi Mochizuki, Bloomberg News | Updated: 10 May 2021 16:55 IST

PlayStation 5 Will Remain in Short Supply Till Next Year, Warns Sony

Photo Credit: Aneesh Arora

The PS5 has been difficult to find in stock since its release in November

Highlights

Sony had sold 7.8 million units of the console through March 31
Sony told analysts it is challenging to keep up with strong demand
Shares have dropped about 8 percent since the earnings report on April 28

Sony Group warned a group of analysts the PlayStation 5 will remain in short supply through 2022, suggesting the company will be constrained in its ability to boost sales targets for its latest games console.

While reporting financial results in late April, the Japanese conglomerate said it had sold 7.8 million units of the console through March 31, and it is aiming to sell at least 14.8 million units in the current fiscal year. That would keep it on pace to match the trajectory of the popular PlayStation 4, which has sold in excess of 115.9 million units to date.

In a briefing after those results, Sony told analysts it is challenging to keep up with strong demand. The PS5 has been difficult to find in stock since its release in November, in part because of shortages in components such as semiconductors, and the company hasn't given an official estimate for when it expects supply to normalise.

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“I don't think demand is calming down this year and even if we secure a lot more devices and produce many more units of the PlayStation 5 next year, our supply wouldn't be able to catch up with demand,” Chief Financial Officer Hiroki Totoki said at the briefing, according to several people who attended and asked not to be named as it wasn't public.

A Sony spokesman declined to comment.

Sony said it would buy back up to JPY 200 billion (roughly Rs. 13,490 crores) of its own shares after reporting profit for the March quarter that fell short of analyst estimates. It forecast that operating profit would slide about 4 percent in the current fiscal year, but analysts have been weighing whether the company could exceed the conservative outlook with the help of strong demand for the new console and games.

Shares have dropped about 8 percent since the earnings report on April 28, after rising 75 percent over the previous year.

Totoki told analysts that Sony needs to ramp up production as soon as possible and make sure there are consoles on store shelves. Demand will remain high regardless of the COVID-19 situation, the CFO assured an analyst wary about Sony's ability to fully capitalise on the stay-at-home entertainment surge triggered by lockdowns and emergency orders.

“We have sold more than 100 million units of the PlayStation 4 and considering our market share and reputation, I can't imagine demand dropping easily,” he said.

Still, the company's latest earnings report suggests that stay-at-home demand is leveling off. Sony said monthly active users on PlayStation Network fell to 109 million at the end of the January-March period from 114 million a quarter earlier and sales of full games also declined in the period from a year earlier.

Rival Nintendo warned last week that component shortages could affect production. It's officially targeting sales of 25.5 million consoles in the year ending March 2022, down slightly from the previous year. But internally, Nintendo's management is said to be shooting for production of between 28 and 29 million consoles, Bloomberg News has reported.

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Sony PlayStation 5

REVIEW
KEY SPECS
NEWS

Good
DualSense is great
Very powerful
Reduced loading times
Friendlier storage expansion
Capable of 8K / 120fps
4K Blu-ray player (finally)

Bad
Expensive
Lack of truly next-gen exclusives
Not a generation leap over PS4 Pro at launch
Game prices now go up to Rs. 5,000
Missing next-gen upgrades for PS4 games
No "Quick Resume", as on Xbox Series X
Limited backward compatibility
No support for Dolby Vision, Dolby Atmos
SSD storage amount is restrictive

Read detailed Sony PlayStation 5 review

HDD 825GB PCie Gen 4 NVMe SSD

Processor Custom 8-core AMD Zen 2 CPU @ 3.5GHz with SMT

Graphics Custom AMD RDNA 2 GPU 36 CUs @ 2.23GHz (variable frequency)

RAM 16GB GDDR6

USB 4

Weight 4.5kg

Ethernet Gigabit

More Sony Gaming Consoles

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