Sony doesn’t expect to be able to meet demand for the PlayStation 5 this year, with shortages continuing into 2022. The console continues to sell for elevated prices on eBay, with completed auctions that ended in a sale showing prices between $750 – $900 for the most part. Things have improved a bit over the past few months but won’t be normal anytime soon.
“I don’t think demand is calming down this year and even if we secure a lot more devices and produce many more units of the PlayStation 5 next year, our supply wouldn’t be able to catch up with demand,” Chief Financial Officer Hiroki Totoki told a closed briefing that had not previously been reported to the public, according to Bloomberg.
We’ve framed the headline as “into 2022” because that echoes reporting from other sources, but that’s not the only way to read what Totoki is saying. The statement could be read to imply that issues could continue through the entirety of next year and into 2023. With that said, Totoki isn’t guaranteeing a supply-side shortage. He’s predicting that demand for the PS5 is so high, Sony won’t be able to meet it even if the company is able to accelerate its manufacturing ramp. There’s a difference between “We can’t build enough PlayStation 5s due to component shortages and we don’t know when that will change,” and “Demand for the PS5 is so high we won’t be able to meet it, even if supply shortages improve.”
The second scenario allows for the possibility that supply shortages will improve and that Sony may yet be able to substantially increase PlayStation 5 production. It’s also a way for Sony to flex about the high demand for its console.
Several months into the semiconductor shortage we know something of its nuances. There is no single component or part responsible for the current supply restrictions. A variety of components and substrate materials have been affected. Foundries across the world are doing everything they can to increase production. The second-tier foundry UMC recently announced it would spend several billion dollars over the next few years ramping up 28nm production. While small compared with the $20B – $100B capital expenditures planned by Intel and TSMC, it’s unusual for a second-tier foundry to invest in aggressively expanding a mature node.
There’s at least some hope that Sony can improve the current situation even if it can’t fix it altogether. The more PlayStation 5s in the market, the less they’ll go for on eBay.
The semiconductor industry has lined up behind the idea that high demand will be an ongoing problem for the next 6-12 months. The number of active users on the PlayStation Network per month is down slightly (109 million in Jan-March, compared with 114 million the previous quarter), with full game sales also dropping slightly from year-ago numbers. This suggests that at least some of the demand boom we saw in gaming will pull back, but doesn’t give us any idea how much. If nothing else, this will make for an interesting test: After more than a year of gaming, will people stick with the hobby as vaccination campaigns roll on and life returns to normal? Or will they flip off the TV and find something — anything — else to do?
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