PS5: Sony lowers sales forecast due to production problems

by Jerry

Sony now expects to produce 11 million PlayStation 5s by the end of the fiscal year at the end of March 2021 – up from the original 15 million. The group is experiencing production problems with its custom System-on-Chip. Difficulties that should weigh on the profitability of the console.

Sony now says it will produce "only" 11 million PS5 by the end of the fiscal year at the end of March 2021 compared to the 15 million originally planned. A source quoted by the business paper Bloomberg explains that Sony would have had difficulty producing the console's System-on-Chip (SoC). As a result, production output would have fallen below 50%,forcing Sony to forecast fewer units than its own forecasts.

PS5: Sony is experiencing production problems with the console's SoC

The source adds that the yield is gradually increasing,but has not yet reached a stable level. News that is already scaring investors – Sony's stock ended down 2.4% at the end of Tuesday's session. This is its lowest level since July. According to the newspaper, the difficulties could have lasting consequences on the group's results. The performance problems in the production of SoC mean that the cost of the components will weigh very heavily on the profit margin of the PS5.

Sony has yet to reveal the price of its consoles. Sony was indeed outpaced by Microsoft who announced that the Xbox Series S would be sold for 299 euros and the Xbox Series X 499. Bloomberg thinks in passing that the standard PS5 will be sold the equivalent of 449 dollars against less than 400 dollars for the 100% dematerialized version. Sony will likely sell the console "at a loss" at first. However, the group will be able to catch up with sales of games and services in a market that is currently quite well-disposed towards the video game industry.

Read also: PS5 – Sony holds a new conference on September 16, 2020 at 10 p.m.

As Bloomberg points out, the COVID-19 outbreak had indeed led the firm to revise its forecast upwards a few weeks ago. Optimism boosted by the particularly rapid adoption rate of its PlayStation Plus subscription as well as record sales of The Last of Us: Part II and Ghost of Tsushima.

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