Want to buy a PS5 for the holidays? You may be out of luck
Consumers looking to gift the game this holiday season may be out of luck, as the PS5 and Xbox Series X, both released nearly a year ago, will likely still be in short supply until mid- 2022, said Lewis Ward, research director. games and VR/AR at International Data Corporation (IDC), a technology media and marketing services company.
Part of the problem is that production schedules were set in stone before significant changes occurred in the market due to the coronavirus pandemic.
“These things were on lockdown before COVID hit,” Ward said. “So they already had their assessment of how many they were going to sell, how many they would make, based on a baseline, which turned out to be wrong.”
In 2019, Microsoft (MSFT) and Sony (SONY) announced plans to release their respective consoles in late 2020. After the onset of the pandemic, both companies remained firm on their release dates. Despite the cancellation of E3, a major marketing conference within the video game industry, and several other pandemic-related issues with marketing events, Microsoft and Sony have decided to release the consoles in November 2020 as planned. .
“It obviously introduces a level of complexity that any company would prefer not to have to deal with,” PlayStation CEO Jim Ryan said of the pandemic’s impact on the PS5 release. in a 2020 BBC interview. “But we feel really good with the supply chain, we’re going to launch this year and we’ll be global.”
Because the pandemic has increased the consumer base, demand has far exceeded the established supply of PS5 materials.
The increase in work-from-home activity and digital employment, which has caused an increase in demand for IT goods, has compounded the problem. As people went into lockdown and were forced to spend more time in the house due to quarantines, they generally had more time to play video games. The growing demand for games, and home entertainment in general, is driving a growing demand for the latest consoles. This disconnect between supply and demand was the main cause of the shortage, Ward said.
“Many more people [are] have to stay home,” Ward said. Job losses, social distancing requirements and quarantine have led to a “mass influx of games” since 2020.
“You can see it on consoles, PCs, mobile devices, almost any angle you look at,” Ward said. “So the problem was that the demand far exceeded the supply.”
Shortage of semiconductors
Higher-than-expected demand was one of the factors behind PS5 and other console shortages; another major element was the shortage of semiconductors caused by the pandemic.
The severe shortage of semiconductor chips, which some industry executives have signaled they may continue beyond 2022began in 2020 after the pandemic disrupted supply chains across the world and halted industry production.
Various factors contributed to the shortage. For a, increasing production capacity in the chip industry requires costly production overhaul and frequent retooling. Rifts between different chip-dependent industries have emerged, with automakers, smartphone makers and computer makers all needing scarce semiconductors.
Additionally, it has been difficult for semiconductor manufacturers to gauge the exact amount of chips they need to produce. Manufacturers have placed orders for more chips than they actually need, in part because they fear the entire order will not be fulfilled. This has caused confusion among semiconductor manufacturers, who are struggling to determine how much to invest in production facilities.
“From semiconductors to SSDs…there are multiple components [of the new consoles] which has been limited in supply for a variety of reasons,” Ward said. The supply schedule for these components is unlikely to change by the end of the year, but consumers can wait until the middle of next year for a possible increase in availability. “We don’t think it will be until mid-2022, when additional capacity comes online at the end of this year.”
“We are making steady progress with the global supply available and cannot wait for the day when everyone who wants a PS5 can easily get one,” said Veronica Rogers, SVP, Head of Global Sales and Business Operations, Sony Entertainment. .
No word has been given on an expected date for the PS5s to become widely available. Microsoft also remained silent on updates.
Ward noted that while it is difficult to arrive at exact dates, we can expect a balance between supply and demand to arrive next year.
“We think it’s going to be very tight in terms of what’s available,” he said. “A lot of gamers are going to be unhappy because they’re going to continue to struggle to get the consoles they want, most likely until the end of this year. But by the middle of 2022, we estimate there will be there will essentially be a rationalization between supply and demand, and things will go back to more of a basic normal, if you will.
Not in the interests of companies to increase production
Increasing supply to meet consumer demand may not be in Sony’s interest right now, Ward said.
“Supply may be available, and maybe they could create other systems by paying people on the assembly line overtime or whatever,” he said. “It’s just going to drive more red for those companies. So they might not want to do that because again, it could push console revenue further into the red.
Raising sales too much by increasing demand would increase costs and could reduce future sales in 2022 and beyond, he added. “So it’s not necessarily a good idea for them to take advantage of all that demand.”
find console
While it’s by no means easy and most consoles sell out within seconds of being listed online, plenty of people have managed to get one. Nowadays, more than 16 million consumers managed to buy one of the latest consoles (either the PS5 or the Xbox Series X/Series S).
Scalpers have made it even harder for consumers looking to buy a next-gen console. On sites like StockX and eBay (EBAY), PS5 and Xbox Series X are available for over $700 (while retail prices are usually $400-$500). Some scalpers used bots buy existing consoles as soon as they launch on retailer websites, much to the chagrin of consumers looking to use the consoles.
Several sites have compiled topical guides to help consumers looking to purchase a console at retail price. Websites such as CNet has a “PS5 tracker” which includes links to retailers selling the console and information on when the drops become available to the public.
Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.
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