Chip shortage affects console iteration Sony: let PS4 fight for another year

Sony Group, which unveiled its new VR helmet and adapted new games at the 2022 International Consumer Electronics Show (CES) last week, seems to be making an ambitious foray into meta-universe. But the reality is that the PlayStation 5, which runs the game and connects to the VR helmet, is facing stagnant production.

Sony's flagship PlayStation 5 (hereinafter referred to as "PS5") game console has been in short supply since its debut in November 2020, according to industry insiders, and Sony told assembly partners at the end of last year that it would continue to produce its earlier generation of PlayStation 4 machines until the end of this year.

A Sony spokesman also confirmed that production of the PS4, would continue this year and said the company had no plans to stop production of the console. "the PS4 is one of the best-selling game consoles of all time, and there is always a cross between generations of products."

Sony had planned to stop assembling the PS4, by the end of 2021, but disruptions in the global supply chain limited PS5 production, industry insiders said. So Sony hopes to produce another 1 million PS4, this year to help offset some of the pressure on the PS5. The chips used in the old game console PS4 are less advanced and easier to manufacture, providing a cheap alternative to PS5.

For PS5, the most serious bottleneck in the supply chain is cheap general-purpose chips for audio, power and wireless communication functions. Some console makers have found that even a higher purchase price cannot guarantee the supply of such components because the chips currently needed have been sold out. In addition, the distribution of finished game consoles is also a challenge due to the sharp rise in transportation costs.

Filling production orders with a lower-cost PS4 would also give Sony more leverage in negotiations with manufacturing partners and get a better deal, two people familiar with the matter told the media.

The PS4, released in 2013, has sold more than 116 million units so far and remains a popular choice for gamers, providing Sony's games division with huge revenue from subscriptions and software sales.

Jim Ryan, president and CEO of Sony Interactive Entertainment (SIE), has told reporters that Sony hopes to quickly transition players from PS4 to the latest PS5. As a result, the console is hard to buy and lacks high-quality exclusive games.

According to a Sony executive, the company believes that extending the availability of the PS4 will allow new players to access Sony's systems. If there is a shortage of goods on the market, they may switch to Nintendo or Microsoft's game ecology. Given that there is still a large proportion of home-based workers around the world, Sony will not let its competitors take in a large number of potential customers so easily.