PS5 sales surge despite semiconductor shortage

Sony shipped 7.8 million PlayStation 5s between the new console’s November 2020 launch and the end of March, with demand outstripping supply, the company said in its latest financial reports.

Why it matters: The video game business has boomed since the onset of the coronavirus pandemic, but a shortage of semiconductors threatened to slow down the manufacturing of new game consoles, including the PS5.

• “Supply has not been able to keep up with extremely strong demand for PS5, although constraints on the supply of components, especially semiconductors, is expected to continue this fiscal year,” Sony chief financial officer Hiorki Totoki said in a livestreamed conference for media and investors.
• Sony nevertheless expects to sell more than 14.8 million PS5s between April 1 and the end of March 2022, beating the wildly successful PlayStation 4 over a similar timeframe in its lifecycle.

The big picture: Sony, like rivals Microsoft and Nintendo, launch new consoles every seven years or so. That initially led to high expectations for fall 2020, when new PlayStations and Xboxes were set for release. But the onset of COVID-19 led to uncertainty.

• The PS5 and rival Xbox Series X have been hot since their November launches, constantly selling out.
• Amazon is out of stock of either new console right now.
• Over on eBay. The ostensibly $500 PS5 is listed for $700 and way higher.

Between the lines: Sony also reported record income for its gaming division, which includes consoles, games and services, at some 342 billion yen ($3 billion) for the past year.

• To help fuel its PlayStation business, Sony announced plans to increase spending on game development by 20 billion yen ($184 million).

• Sony’s game-development prowess was always strong, but kicked into overdrive in the PS4 generation, as it produced numerous game-of-the-year contenders such as “God of War” and “Ghost of Tsushima,” from U.S. based studios Sony Santa Monica and Sucker Punch.
• But a recent downsizing of its critically acclaimed Tokyo game studio had prompted questions about potential issues with Sony’s game development.

The bottom line: In gaming, one party’s success is usually another’s misfortune. Not so right now. Microsoft also reported strong Xbox numbers yesterday and Nintendo’s Switch business remains a rocket ship.

For gaming’s biggest players, COVID has introduced some obstacles, but has largely made them even bigger players in entertainment.

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