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PS5 crunch: Sony to continue producing PS4 consoles through 2022 to navigate supply disruptions



Sony Group will continue to produce PlayStation 4 consoles throughout 2022 as it navigates disruptions in the global supply chain, with limited production of its pricier PlayStation 5. The Japanese conglomerate, whose flagship PS5 console has been in scarce supply since its debut in November 2020, told Assembly Partners late last year that it would expect its previous generation through this year, according to people familiar with the matter. The machine will continue to build. While Sony never officially announced when it would stop making the PS4, it had previously planned to kick off assembly in late 2021, he said, asking not to be named because the plans are not public.

The strategy will add about a million PS4 units this year to help ease some of the pressure on the company’s PS5 production, a figure that will be adjusted in response to demand, the people said. The older console uses less advanced chips, is easier to build and offers a budget-friendly alternative to the PS5.

Two people said increasing production orders by adding a cheaper-to-make PS4 would give Sony more leeway in negotiating with manufacturing partners for a better deal.

A Sony spokesperson confirmed that PS4 production will continue this year and said the company doesn’t plan to stop making the console. “This is one of the best-selling consoles of all time and there is always a crossover between generations,” the company said. Sony’s ambition with the PlayStation 5 (Review) was to make a quick transition to the latest hardware, PlayStation chief Jim Ryan has said. But the coronavirus pandemic slowed software development in the games industry, while also triggering a surge in demand for hardware that makes even the most basic components scarce. The result has been a console that is hard to find and lacks a strong portfolio of specialty games.

The predecessor PS4, released in 2013, has sold over 116 million units so far and remains a popular choice among players. It still provides a substantial portion of Sony’s gaming division income from subscription and software sales.

The PlayStation unit is grappling with a series of unforeseen challenges, including the slow pace of PS5 production and online scalpers shutting down retail supplies of the new console. According to a Sony official who is not authorized to speak publicly, PS4 availability is seen as a means of filling the supply void within the company and keeping gamers within the PlayStation ecosystem.

Sony cuts PS5 assembly plans after chip shortage

Among the most serious supply chain bottlenecks today are inexpensive general-purpose chips for audio, power and wireless communication tasks. Some console makers have found that even offering a higher price will not secure the supply of such components as all current production has already been sold, according to the public. Even with ready-made consoles, delivery remains a challenge as shipping costs have risen exponentially.

While gaming remains Sony’s biggest source of revenue, the Japanese electronics giant is exploring new areas to keep up with growth. It is preparing to release more powerful virtual reality headsets to take advantage of future games and applications in the so-called metaverse and is considering launching its own electric vehicle.

© 2022 Bloomberg LP

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