Sony lowered forecast for PlayStation 5 by 4 million due to problems with the chip

By | August 3, 2021

Sony lowered forecast for PlayStation 5 by 4 million due to problems with the chip

Sony Corp. has slashed the estimated production of the PlayStation 5 this fiscal year by 4 million units to roughly 11 million due to manufacturing issues with its on-chip system specifically designed for the new console. according to people familiar with the problem.

The Tokyo-based electronics giant ramped up orders from suppliers in July in anticipation of increased demand for games during the holiday season, not just because people are spending more time at home due to the coronavirus.

But the agency faced manufacturing demanding situations along with product yields of as much as 50% for SOC, which decreased its potential to provide as many consoles as it desired, folks that requested anonymity said. due to discussions, they are not public. According to them, the profitability has gradually improved but has not yet reached a stable level.

Sony shares lost profit to close on Tuesday, falling 2.4%, their lowest level in July. A Sony spokesman declined to comment.

If the news were correct, we would consider the decline to be negative,” analysts at Citigroup, including Kota Ezawa, wrote in response to Sony’s revised production targets report.

Analysts also noted that concerns about the SOC’s profitability would increase component costs and impact margins. Sony’s low outlook is only approximate and could be revised again before the end of the fiscal year in March 2021.

The closest competitor is Microsoft Corp. Aggressive pricing for two modern consoles, the $ 299 Xbox Series S and the $ 499 Xbox Series X, was revealed last week, putting additional pressure on Sony. Pre-orders for the new Xbox models begin on September 22nd.

Sony is expected to announce the PlayStation 5 launch and pricing plans in a legitimate video presentation scheduled for Wednesday. According to Bloomberg Intelligence analyst Masahiro Wakasugi, a full PS5 console could cost as little as $ 449, while a slimmer digital version could drop below $ 400.

Sony kicked off the year with conservative PS5 production plans and tried to address the pricing issue for the next console update.

The Covid-19 pandemic has brought about an upward revision of the agency’s forecasts as it witnessed the quickest adoption of the PlayStation Plus subscription carrier and document income of the summer editions of The Last of Us: Part II. and the ghost of Tsushima.

Nintendo Co. plans to release an updated version of the Switch console in 2021 with improved components and possibly a 4K version.

It will be accompanied by a series of new high-quality games that will challenge Sony’s efforts. and Microsoft to register more players to use their services.

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