Sony cuts Playstation 5 forecast by 4 million units1 minute read

The fiscal year for Sony looks much bleaker due to “chip woes” in PS5 production costs

Sony cuts Playstation 5 forecast by 4 million units, down to around 11 million for this fiscal year. This follows issues around production of the new custom-designed system-on-chip.

Sony boosted the orders from suppliers in July due to coronavirus and the fact more people are staying at home. However production yields as low as 50% have now put a dampener on this tactic. They now have a limited ability to produce the amount of consoles they would have liked. Sony shares dipped 2.4% on Tuesday which is the lowest since July.

If the production cost and low yields are accurate then Sony will experience a higher production cost, which would effect their profit on the consoles. As the official price for both PS5 variants has yet to be revealed it is uncertain as to whether this price will be passed to the consumer.

Microsoft revealed only last week that their digital and full versions of the next generation of Xbox consoles will be £249 ($299) and £449 ($499) respectively. The competitive pricing on these consoles will already be putting presure on Sony, who are yet to reveal their prices and are yet to comment on the production issues. Nintendo are also rumoured to be planning a 4K variant of the Nintendo Switch which could land in 2021. This would challenge both the sales of the Xbox Series X/S and the Playstation 5.

Sony saw a fantastic peak in 2020 with high sales of The Last of Us II and The Ghost of Tsushima. There were also record subscriptions to Playstation Plus. This latest news may tarnish the ledger for 2020.