According to Bloomberg, Sony is planning to reduce the production of PlayStation 5 consoles for the current fiscal year. Insiders told the outlet that, Sony’s decision is unrelated to the COVID-19, the company is struggling to decide the initial price of the console and it’s margin profit.
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.
Insiders claims that Sony will be drop the retail value of the PS4 and PS4 Pro in order to create a surge in new PlayStation Plus subscribers. PlayStation 5’s expensive hardware will prevent the company to make a profit after selling the console. Sony’s Chief Executive Officer Kenichiro Yoshida has stated the company rather increase the reccuring revenue than depending on one-time hardware purchases.
Game developers anticipate the console to be in the region of $499 to $549, one of the most expensive components of the console is the revolutionary SSD. A report from February indicated how the rising cost of flash memory will be influential for both Microsoft and Sony to determine the initial cost of their next gen devices.
Experts at The Motley Fool analyze the situation, and “the flash memory prices could jump by 40% in 2020”, the cause is due to high demand in the smartphone market who might be a priority for the manufacturers of this kind of hardware. As it has been confirmed the Sony PS5 and the Microsoft Xbox Series X will feature solid-state storage devices.