Production problems mount as PlayStation 5 launch draws near

There was never any doubt that getting your hands on a PlayStation 5 was going to be challenging this holiday season. That’s true during the first year of any console launch. But it could be trickier than usual in 2020. And that could give Microsoft the opening it’s been seeking for the past seven years.

Bloomberg on Tuesday reported that Sony has cut PS5 production by 4 million units, due to production issues with the system’s key computer chip. Perhaps more concerning, though, is the assertion that production yields on the chip have been as low as 50% — and still aren’t stable.

If true, that raises a few fears. The biggest is whether there might be hardware issues with the units that do ship to consumers. While Sony’s quality control record is solid, the push to get as many units as possible to consumers this year could result in some problems slipping through if there are widespread failures.

Sony, it’s worth noting, has denied the Bloomberg report, telling Digital Trends: “While we do not release details related to manufacturing, the information provided by Bloomberg is false. We have not changed the production number for PlayStation 5 since the start of mass production.”

Even if there is a problem like the one Bloomberg described, it’s not a fatal one – the success of the Xbox 360 after the Red Ring of Death is proof. It is, however, a headache of migraine proportions and a PR nightmare. And with Microsoft making a compelling value proposition as the next generation kicks off and Nintendo reportedly waiting in the wings with a 4K Switch and slate of big games coming in 2021, it’s something Sony could do without.

If chip production yields are lower, that could also raise the cost of each new console on Sony’s side. This likely won’t dramatically impact the consumer price – Sony could take a loss on consoles for a short period if necessary, even if it would prefer to avoid that – but it would make it harder to match or beat the prices on the Xbox Series X and Series S.

There is one bright side: Sony, a few months ago, increased its PS5 orders with suppliers, hoping to ride the COVID-19 bump into the next generation. That could help diminish any impact from potential yield issues, but it’s still not optimal.

While the possibility of supply issues is frustrating for companies, the timing of this one would be especially so for Sony, since the launch of the next generation of consoles is its to lose. The company has held the lead over Microsoft during the cycle since the Xbox One and PS4 went on sale in 2013. And Sony hopes to roll over that customer goodwill to the PS5.

At first, that seemed a fait accompli. Microsoft put the majority of its software eggs in the Halo Infinite basket. With that game delayed, the Xbox Series X is launching without a clear “must-have” title (while the PS5 seemingly has several coming out at or near launch).

Microsoft has pivoted smartly, though. By emphasizing the value proposition of Game Pass, throwing in xCloud as a free incentive for Ultimate members, then rolling out the $299 Series S – a box that’s clearly set up as a streaming hub – it has managed to raise the eyebrows of even Sony fans.

We’ll almost certainly see how Sony reacts to the Series S (and Series X) pricing later this week. The whisper of supply troubles could nudge some fence-sitters toward the Microsoft camp, though – especially aunts, uncles, and grandparents who want to be heroes this holiday but don’t know exactly what to buy.

Sony, of course, is far from out of the race at this point. The company showcased a cornucopia of impressive games at its last showcase, and there’s no reason to expect it will underwhelm later this week. But chip problems this late in the production process are uncommon – and, if the Bloomberg piece is accurate, it’s the first sign that the launch of the PS5 might not be as seamless a process as it appeared.

It’s also a sign that even if it didn’t appear so four months ago, this could be a much tighter battle between Microsoft and Sony than anyone was expecting.

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