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Sony faces PlayStation 5 shortage by making more PS4s

Bloomberg — Sony Group Corp. (SONY) will continue to produce PlayStation 4 consoles throughout 2022 as it navigates global supply chain disruptions that have limited production of its more expensive PlayStation 5.

The Japanese conglomerate, whose flagship PS5 console has been in short supply since its debut in November 2020, told its assembly partners late last year that it would continue manufacturing its previous-gen device later this year., according to people familiar with the matter. Although Sony never officially announced when it would stop manufacturing the PS4, it had previously planned to stop assembling it at the end of 2021, the people said, asking not to be named as the plans are not public.

The strategy would add around a million PS4 units this year to help offset some of the pressure on the company’s PS5 production., a figure to be adjusted based on demand, the people said. The older console uses less advanced chips, is easier to build and offers a cheap alternative to the PS5.

Increase production orders by adding the PS4, cheaper to manufacture, it would also give Sony more wiggle room when negotiating with manufacturing partners to get a better dealsaid two of the people.

A Sony spokesperson confirmed that PS4 production would continue this year and said the company had not planned to stop making the console.. “It is one of the best-selling consoles in history and there is always crossover between generations,” the company said.

Sony’s ambition with the PlayStation 5 was to make a quick transition to the latest hardware, PlayStation boss Jim Ryan has said. But the coronavirus pandemic slowed down software development across the gaming industry, while triggering a surge in demand for hardware that has made even the most basic components scarce. The result has been a hard-to-find console that lacks a strong portfolio of must-have exclusive games.

The PS4, released in 2013, has sold more than 116 million units to date and remains a popular choice among gamers.. It still provides a substantial chunk of revenue for Sony’s gaming division thanks to subscriptions and software sales.

The PlayStation unit is grappling with a number of unforeseen challenges, such as a slower-than-expected pace of PS5 production and online resellers choking off retail supply of the newest console. Expanding the availability of the PS4 is seen as a means of filling the supply gap and keeping players within the PlayStation ecosystem., according to a Sony official who is not authorized to speak publicly.

One of the biggest bottlenecks in the supply chain is cheap general-purpose chips for audio, power, and wireless communication functions.. Some console makers have realized that even offering a higher price won’t be able to secure supplies of these components, as all current production has already been sold, according to these people. Even with the consoles finished, distribution remains a challenge, as shipping costs have skyrocketed.

Although gaming remains Sony’s biggest source of revenue, the Japanese electronics giant is exploring new fields to sustain growth. It is preparing to launch more powerful virtual reality devices to take advantage of future games and applications of the so-called metaverse. and is considering launching its own electric vehicles.

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This article was translated by Andrea González

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