The ninth generation of console hardware has gotten off to a rocky start, and it’s not likely to let up until this summer.
The New York Times recently reported on how both Sony and Microsoft have had a hard time keeping their new consoles on store shelves, where diehard fans compete with scalper botnets to scoop up any available units.
For the last couple of months, finding a PlayStation 5 or Xbox Series X|S in a store for anywhere near their standard MSRP has been a gold strike. (They’re reasonably easy to find on online auction sites, especially the dodgy ones, where they’re typically sold for at least a 150% markup.)
Now, executives at both companies, as well as businesses in their supply chain such as AMD, are saying supplies may remain limited until the second half of the year.
The good news, as far as Sony and Microsoft are concerned, is that the demand means instant sell-through on any units they manage to get into circulation. While neither company is in the habit of regularly divulging their sales numbers, independent analysts estimate Sony with between five and six million PS5s sold since the systems’ launch week in mid-November, and Microsoft with between two and three million.
The demand can be credited for some of Microsoft’s record-high earnings from its Xbox division, but consumer frustration is visibly building. This leaves both Sony and Microsoft in a precarious position; right now, sales are high and they can’t keep any edition of either console in stock, but there’s a point where consumer backlash is going to kick in.
In an interview with the New York Times, Microsoft’s Mike Spencer laid down some of the reasons for the Xbox shortage. It’s an issue confronting most of the game industry’s manufacturing sector. Simply put: there are a lot of disruptions in the global electronics supply chain right now, and PS5/XSX availability is just one of the effects thereof.
A lot of it can be attributed to knock-on effects from the COVID-19 pandemic. Lockdown measures in China, where most console parts are made, have created bottlenecks in the international supply chain, which makes it difficult for any company to place component orders at the moment. There’s also a chance that worldwide vaccine rollouts can impact shipping logistics, which makes it substantially harder to get a new console from its factory in mainland China to a store shelf in North America.
Both AMD and Nvidia have also been suffering through a global shortage of GDDR6 memory, a particular kind of RAM that plays a key role in modern high-end gaming hardware. (PC gamers have had a real issue for the last few months when trying to upgrade to the newest video cards, and that shortage is why.) Since both the PlayStation 5 and Xbox Series X run off of custom AMD hardware, AMD’s problems are the console market’s problems.
This leaves both Sony and Microsoft in a precarious position at the moment. Both companies are currently enjoying the benefits of high demand, but another five months of shortages could have a substantial knock-on effect on how games develop in the ninth generation. There’s no point for studios, particularly third-party independent studios, to make games that fully exploit the particular features of the PS5 or XSX if nobody has either of them.
More importantly, there is a point where hype dies. Right now, there’s still a lot of enthusiasm for ninth-generation hardware in games enthusiast circles, but it’s difficult to keep an audience interested when they’ve got little realistic chance of ever buying that hardware themselves. Like a lot of other things in the 2021 games industry, this is a balancing act.
