Want to buy a PS5 for the holidays? You may be out of luck

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Consumers wishing to give the game as a gift this holiday season may be out of luck, as the PS5 and Xbox Series X, both released nearly a year ago, will likely still be in short supply until mid -2022, said Lewis Ward, research director. games and VR / AR at International Data Corporation (IDC), a technology media and marketing services company.

Part of the problem is that production schedules were frozen before major changes in the market occurred due to the coronavirus pandemic.

“These things were on lockdown before COVID hit,” Ward said. “So they already had their assessment of how many they were going to sell, how many they would earn, based on a baseline, which turned out to be flawed. “

In 2019, Microsoft (MSFT) and Sony (SONY) announced their intention to release their respective consoles in late 2020. After the pandemic began, both companies remained firm on their release dates. Despite the cancellation of E3, a major marketing conference within the video game industry, and several other pandemic issues with marketing events, Microsoft and Sony have decided to release consoles in November 2020 as planned. .

“This obviously introduces a level of complexity that any business would prefer not to have to face,” PlayStation CEO Jim Ryan said of the pandemic’s impact on the release of the PS5 in an interview with the BBC. in 2020. “But we feel really good in the supply chain, we will launch this year and we will be global.”

dtcc Because the pandemic has increased the consumer base, demand has far exceeded the established supply of PS5 materials.

The increase in home working and digital employment has made the problem worse, leading to an increase in demand for IT goods. As people went into lockdowns and were forced to spend more time at home due to quarantines, they generally had more time to play video games. The growing demand for games and home entertainment in general, is driving an increase in demand for the newer consoles. This disruption between supply and demand was the main cause of the shortage, Ward said.

“A lot more people [are] have to stay home, ”Ward said. Job losses, social distancing requirements and quarantine have resulted in a “massive influx of games” since 2020.

“You can see it on consoles, PCs, mobile devices, from almost any angle you look at,” Ward said. “So the problem was that demand far exceeded supply.”

Living room with a Microsoft Xbox Series S video game console next to a TV and sound bar, taken October 27, 2020 (Photo by Phil Barker / Future Publishing via Getty Images)

Semiconductor shortage

Higher than expected demand was one of the factors leading to the shortage of PS5s and other consoles; another major factor was the semiconductor shortage caused by the pandemic.

The severe shortage of semiconductor chips, which some industry executives believe could continue beyond 2022, began in 2020 after the pandemic disrupted supply chains across the world and halted the industry production.

Various factors have contributed to the shortage. On the one hand, increasing production capacity in the chip business requires costly overhaul of production and frequent retooling. Gaps between different chip-dependent industries have emerged, with car makers, smartphone makers, and computer makers all in need of scarce semiconductors.

Additionally, it has been difficult for semiconductor manufacturers to assess the exact amount of chips they need to produce. Manufacturers have placed orders for more chips than they actually need, in part because of concerns that the entire order will not be fulfilled. This has created confusion among semiconductor manufacturers, who are struggling to determine how much to invest in production facilities.

“From semiconductors to SSDs… there are many components [of the new consoles] whose supply has been limited for various reasons, ”said Ward. The timing of the supply of these components is unlikely to change by the end of the year, but consumers can wait until the middle of next year for a possible increase in availability. “We don’t think it will be until the middle of 2022, when additional capacity comes online at the end of this year.”

“We are making steady progress with the available global supply and look forward to the day when anyone who wants a PS5 can easily get one,” said Veronica Rogers, SVP, Head of Global Sales and Business Operations at Sony Entertainment.

No word has been given on an expected date for the PS5 to become popular. Microsoft has also been silent on updates.

Ward noted that while the exact dates are difficult to determine, we can expect a balance between supply and demand to occur next year.

“We think it will be very tight in terms of what’s available,” he said. “A lot of gamers are going to be unhappy because they’re going to continue to struggle to get the consoles they want, most likely until the end of this year. But by the middle of 2022, we estimate that there will be essentially a rationalization between supply and demand. And things will get back to baseline, if you will. “

US President Joe Biden delivers semiconductor chip as he speaks before signing an executive order to address a global semiconductor chip shortage in the White House State Dining Room in Washington, DC United States, February 24, 2021. REUTERS / Jonathan Ernst TPX IMAGES OF THE DAY

US President Joe Biden delivers semiconductor chip as he speaks before signing an executive order to address a global semiconductor chip shortage in the White House State Dining Room in Washington, DC United States, February 24, 2021. REUTERS / Jonathan Ernst TPX IMAGES OF THE DAY

Not in the interests of companies to increase production

Increasing supply to meet consumer demand may not be in Sony’s best interest at the moment, Ward said.

“The supply may be available, and maybe they could put other systems in place by paying extra hours to people on the assembly line or whatever,” he said. declared. “It’s just going to result in more red for these companies. So, they might not want to do that, because again that could push console-generated revenue further into the red. “

Increasing sales too much by increasing demand would lead to increased costs and could reduce future sales in 2022 and beyond, he added. “So it’s not necessarily a good idea for them to take advantage of all this demand.”

Find a console

While this is by no means easy and most consoles sell out within seconds of going live, many people have managed to get one. To date, over 16 million consumers have successfully purchased one of the latest consoles (either the PS5 or the Xbox Series X / Series S).

Scalpers have made it even more difficult for consumers looking to purchase a next-gen console. On sites like StockX and eBay (EBAY), the PS5 and Xbox Series X are available for over $ 700 (while retail prices are typically $ 400 to $ 500). Some scalpers have used bots to purchase existing consoles as soon as they launched on retailer websites, much to the chagrin of consumers looking to use the consoles.

Several sites have compiled news guides to help consumers looking to purchase a console at retail. Websites like CNet have a “PS5 tracker” that includes links to retailers selling the console and information on when the drops become available to the public.

Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on twitter @IFanusia.

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