Sony Corp. plans to produce far fewer units of its upcoming PlayStation 5 in its first year than it had for the previous-generation console’s launch, according to people familiar with the matter.
The Tokyo-based tech giant is limiting its initial production run in part because it expects the PS5’s ambitious specs to weigh on demand by leading to a high price at launch, the people said, asking not to be identified because the subject is private. The global Covid-19 pandemic has affected Sony’s promotional plans for the new device but not its production capacity, they added.
The company has told assembly partners it would make 5 to 6 million units of the PS5 in the fiscal year ending March 2021, according to other people involved in the machine’s supply chain. When Sony released the PlayStation 4 in November 2013, it sold 7.5 million units in its first two quarters.
The PS5’s loftier price tag may also deter initial take-up. Game developers who’ve been creating titles for the next PlayStation anticipate its price to be in the region of $499 to $549, and Bloomberg Intelligence’s Matthew Kanterman points to increased component costs pushing up the price required for Sony to break even. Sony has struggled with its price-setting decision for the PS5 because of scarce components, Bloomberg News has reported.
A Sony spokesman declined to comment. Its shares were largely unchanged in afternoon trade.