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Sony (SNE) Bets Big on PS5 in Holiday Season, Rivals Fret

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With the launch of the highly-anticipated PlayStation 5 (PS5) gaming console on Nov 12, Sony Corporation SNE aimed to heighten the festive cheers in the upcoming holiday season and capitalize on the uptick in pandemic-induced nesting activities — games, streaming video and home fitness. The product seemed to have hit the right chords with the gamers from the very onset. Despite appearing in the markets a couple of days after the arrival of Microsoft Corporation’s MSFT Xbox Series X, the gaming console was immediately sold out worldwide. As demand far outstripped supply, rival firms surely have reasons to ponder about the driving factors behind this unprecedented success.

PS5 Launch: A Chaotic Frenzy

The PS5 launch was largely dictated by the coronavirus-triggered social distancing restrictions with Sony focusing primarily on online distribution channels rather than brick-and-mortar retail stores. Nevertheless, the event marked a chaotic frenzy with websites crashing, early orders being canceled, retailers jumping the gun in the pre-order period and delivery firms being blamed for potential later deliveries. This caused widespread product shortfalls, which in turn led to various resellers and Internet bots flooding online retail stores with re-sale offers at exorbitant prices.

In an official statement in response to the apparent shortage of PS5, Sony has assured fans that more stocks will be available before the end of the year. PS4, the predecessor of PS5, had been one of the best-selling gaming consoles in its era and had reportedly sold more than seven million units between its launch in November 2013 and the end of Sony’s fiscal year in April 2014. The top management of the Japanese conglomerate is quite confident that PS5 will exceed this record despite rumored initial hiccups related to manufacturing snag as raw-material supplies were reportedly hit by the virus outbreak. 

Testing Waters?

Some industry experts opine that Sony had intentionally limited the production of PS5 consoles in the wake of the coronavirus pandemic. Notably, videogame companies often keep slender profit margins from hardware sales or even undercut the production costs to rake in more money through the additional sales of lucrative gaming software and online subscription services. With wafer-thin or even non-existent profit margins, Sony is probably aiming to test the waters before running a full-fledged production schedule to cash in on the huge customer response of PS5.

Features Loaded

In order to convince gamers to splurge nearly $500 on this gaming console, Sony is banking on the updated graphics, a newly-redesigned controller and a collection of exclusive games. With a powerful 8-core AMD Zen 2 processor, 10.3 teraflops of graphics power, gorgeous 4K visuals and an immersive end-user experience, the PS5 promises some of the best performance ever witnessed in a gaming console. Moreover, PS5 loads games about 10 to 20 seconds faster than the PS4 Pro and can even read physical discs a few minutes faster, making it an ideal choice for techno-savvy impatient gamers.

With such astonishing features, some of the games have reportedly performed better in PS5 compared with Xbox Series X. Industry experts believe that such performance-related issues stem from the fact that Microsoft has allowed developers to submit games for Xbox Series X certification in June, leaving them with less time to optimize their gaming titles. On the contrary, PS5 developers had access to development kits from the very beginning, thereby offering the required window to solve any complication.

Rivals' Edge

However, Sony apparently loses on the entertainment quotient with less app support on offer. Currently, PS5 has only 24 apps, including Netflix, Inc. NFLX and Hulu, with notable apps missing like Pandora, Sling and Starz that are featured in Xbox Series X that boasts 50 apps. In addition, PS5 comes with 825 GB of storage while Xbox Series X offers 1TB storage capacity.  

Meanwhile, Nintendo Co. NTDOY is reportedly working on an upgraded version of its Switch console and plans to ship it in 2021. With more computing power and 4K graphics, it has created quite a buzz in the gaming arena and aims to derail the hegemony of PS and Xbox models. Nintendo has particularly flourished during the pandemic with its social simulation game titled ‘Animal Crossing: New Horizons’ selling more than 26 million copies since its release in March. Sales of its Switch and Switch Lite consoles have also improved significantly during this period.

Nevertheless, PS5 has created such a buzz with its launch that has surely not gone unnoticed. It appears that the onus is now on rival players to play a catch-up game with Black Friday sales probably offering a curtain raiser of the showdown on offer.

Game on, Gamers….

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