PS5 Production Cut By 4 Million Due To Chip Production Issues
The PlayStation 5's story has never been a smooth one, at least not compared to its rival, the Xbox Series X. Now finally nearing the end of the road before it officially launches, it seems that it still has a few kinks to iron out that will affect its market performance in the months to come. Although figures may still be better than the PS4's first days, Sony has reportedly been having some production issues that have forced it to cut down production targets from 15 million to just 11 million units.
Although production of the PS5 reportedly started way back in July, it's only now that the company is coming to grips with the problems in that pipeline. According to sources speaking on the condition of anonymity, the custom System-on-Chip or SoC, practically the processor that runs the console, has been having production problems. Yields are reportedly only 50%, which is a terribly low number for a new console that's expected to fly off the shelves.
But while Sony has had no choice but cut production goals by 4 million, the PS5's launch might not be hampered by that sudden change. According to analyst Daniel Ahmad, a.k.a. @ZhugeEX on Twitter, the effects of this production yield issue won't be felt until 2021. Even then, the production of the PS5 could still be slightly higher than the PS4.
While PS5 production is expected to be higher than PS4, when aligned, this issue will hit PS5 supply during 2021.
Production yield issues will always exist, especially at the beginning of a console launch, though this does seem more severe than expected.
— Daniel Ahmad (@ZhugeEX) September 15, 2020
Production and supply, however, don't translate to demand. The biggest question mark right now is whether the PlayStation 5 will see high enough demand to even meet that much supply. Sony is, of course, optimistic and has reportedly gone the rather expensive route of booking 60 air freights starting next month to get the console to retailers in time for the usual holiday season.
Sony is, of course, banking on the "new normal" of a COVID-19 world that has seen a significant surge in gaming in the past months. Of course, pricing for the PS5 is still unknown at this point but if the PS5 doesn't sell as much, then Sony won't have much of a supply problem next year. Then again, it would have also made a very costly gamble that could make it bleed in the last quarter of 2020.