Today, Bloomberg reported that Sony cut PlayStation 5 production by 4 million units, making the available number at launch to around 11 million. The issue is due to production problems with its custom-designed system-on-chip for the PlayStation 5. After the news was reported, Sony later made statement to gamesindustry.biz saying that the reports are false. “While we do not release details related to manufacturing, the information provided by Bloomberg is false,” Sony said. “We have not changed the production number for PlayStation 5 since the start of mass production.”
Bloomberg reports that the production yields for the system-on-chip have sunk as low as 50%. This means that Sony can’t produce the number of consoles that they set out. This comes after Sony ramped up production in July. During the first year of release, demand for PlayStation 5 was set to be in limited supply with an estimated 5-6 million units. After reports of Sony ramping up production, an estimated 10 million units will be available by the end of 2020.
Since this news was reported, Sony’s shares were down by as much as 3.5%. This is the biggest intraday drop since August. Citigroup analysts including Kota Ezawa responded to the news saying, “if the news is accurate, we would view the reduction as negative.” They also said that challenges with SOC yields would increase the component’s cost and weigh on profit margins.
Over the weekend, Sony revealed that the next PlayStation 5 Showcase will be taking place tomorrow, September 16, at 1:00 pm PST. This comes after last week where after a leak regarding the Xbox Series S, Microsoft let the cat out of the bag and announced that the Xbox Series X|S launches on November 10, for $499 and $399 respectively. There were reports that Sony would unveil any pricing or launch date details until after Microsoft shared their plans. After the news last week, it looks like we will finally be getting the full picture of Sony’s launch plans which may have been adjusted after the Xbox Series X|S pricing details were revealed. We may also see which games will be available to play on launch as well.