Sony and Microsoft consoles struggle in launch week as stock runs thin
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New gaming consoles launched by Sony Corp. and Microsoft Corp. fell short of their predecessors in terms of sales during their first week in Japan, suggesting persistent supply bottlenecks will hamper the debut of two of this holiday season’s most hotly anticipated gadgets.
Sony sold 118,085 PlayStation 5 (PS5) consoles from its debut on Nov. 12 to Nov. 15, roughly a third of the volume seen over launch weekend for the PlayStation 4 (PS4), Famitsu estimated. Microsoft tallied 20,534 units of its Xbox Series X and S during the six days from its start on Nov. 10, also shy of the 23,562 that the Xbox One managed during its first few days, the research house said.
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Sony fell as much as 1.6% in Tokyo trading on Thursday and Microsoft was down by about the same amount in New York Wednesday. Both fell in line with broader markets.
The estimates provide a first glimpse at sales of the new Xbox and PlayStation consoles, two devices that should dominate wishlists this Christmas. Japan was among the first markets globally to get them and is considered a key battleground between two companies who are vying to establish a lead in next-generation gaming and drive longer-term growth.
“Supply shortages in the U.S., where sales work on a first-come, first-served basis, are similar to those in Japan,” Citi Research analysts Kota Ezawa and Yui Shoji wrote. “This seems to point to low supply quantities, as well as strong post-release demand.”
Factory and logistical disruptions during the COVID-19 pandemic have hurt manufacturers’ ability to keep up.
The outcome is likely more reflective of the available supply than demand for the consoles, as both companies saw their machines sell out on day one, said Serkan Toto, an industry consultant in Tokyo.
Microsoft released its two new consoles to 37 countries simultaneously, a big jump from the 13 markets for the preceding Xbox One generation. The Redmond, Washington-based company has called its launch of the duo the most successful Xbox debut ever, but that feat appears to have come at the cost of thinly spread supply.
Sony is also grappling with inadequate supply as it tries to introduce its new consoles to 65 nations, doubling the 32 that the company covered with the PS4.
Chief Financial Officer Hiroki Totoki told investors in October that supply chain bottlenecks had hampered the tech giant’s efforts to meet demand and that constraints may persist until March next year. In Japan, the company was forced to implement a lottery system to manage PS5 pre-orders.
Microsoft and Sony both say they’re working hard to boost supply of their new machines.
But retailers in Japan say it remains unclear when they will be able to reliably stock the in-demand products. PS5 units on resale marketplace Mercari have hit prices upwards of ¥100,000 from their usual ¥40,000 to ¥50,000.
Not all users are in a rush to obtain the new consoles right away, as most new games are still playable on the departing PS4 and Xbox One consoles. Still, Ace Research Institute analyst Hideki Yasuda said the manufacturers should pump up supply as soon as possible because a loss of initial momentum could damage lifetime sales.
“The first-two-week sales momentum is crucial in forming a consumer sentiment on a product, and that’s why it’s important to prepare enough quantity at launch,” he said.
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