With the launch of the highly anticipated PlayStation 5 (PS5) game console on November 12, Sony Corporation (SNE – Free Report) was aimed at stepping up the festive cheers for the upcoming holiday season and capitalizing on the surge in pandemic-induced nesting activity – games, streaming video and home fitness. The product seemed to have hit the right deals with the players from the start. Despite its appearance on the markets a few days after the arrival of Microsoft Corporationof (MSFT – Free Report) Xbox Series X, the game console immediately sold out worldwide. With demand far exceeding supply, competing companies surely have reason to reflect on the determining factors of this unprecedented success.
PS5 launch: a chaotic frenzy
The launch of the PS5 was largely dictated by the social distancing restrictions triggered by the coronavirus, with Sony focusing primarily on online distribution channels rather than physical retail stores. Nonetheless, the event marked a chaotic frenzy with websites collapsing, early orders canceled, retailers jumping the gun in the pre-order period, and delivery companies accused of possible subsequent deliveries. This has caused widespread product shortages, leading to various resellers and internet robots flooding online retail stores with exorbitantly priced resale offers.
In an official statement in response to the apparent PS5 shortage, Sony assured fans that more stock would be available before the end of the year. The PS4, the predecessor of the PS5, had been one of the best-selling gaming consoles of its time and reportedly sold over seven million units between its launch in November 2013 and the end of Sony’s fiscal year. in April 2014. Senior management at the Japanese conglomerate is fairly confident that the PS5 will surpass this record despite initial rumors of hiccups related to a manufacturing glitch, as raw material supplies were reportedly affected by the virus outbreak.
Testing the waters?
Some industry experts believe that Sony intentionally limited production of PS5 consoles in the wake of the coronavirus pandemic. Notably, video game companies often keep slim profit margins on hardware sales or even cut production costs to earn more money from additional sales of lucrative gaming software and online subscription services. With slim to no profit margins, Sony is likely aiming to test the waters before running a full-blown production schedule to take advantage of the huge response from PS5 customers.
In order to convince gamers to spend nearly $ 500 on this gaming console, Sony is betting on 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, stunning 4K graphics, and an immersive end-user experience, the PS5 promises some of the best performance ever seen in a gaming console. , the PS5 loads games around 10 to 20 seconds faster than the PS4 Pro and can even play physical discs a few minutes faster, making it an ideal choice for tech-savvy impatient gamers.
With such amazing features, some of the games would have performed better on PS5 compared to Xbox Series X. Industry experts believe that these performance issues stem from Microsoft allowing developers to submit games for certification. Xbox Series X in June, leaving them less time to optimize their game titles. On the contrary, PS5 developers had access to dev kits early on, providing the window needed to resolve any complications.
Edge of rivals
However, Sony is apparently losing out on the entertainment quotient with less application support. Currently, the PS5 only has 24 apps, including Netflix, Inc. (NFLX – Free Report) and Hulu, with notable apps missing like Pandora, Sling, and Starz that are featured in the Xbox Series X which has 50 apps. Additionally, the PS5 comes with 825 GB of storage while the Xbox Series X offers 1 TB of storage capacity.
Meanwhile, Nintendo Co. (NTDOY – Free Report) is said to be 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 a buzz in the gaming arena and aims to derail the hegemony of the PS and Xbox models. Nintendo especially prospered during the pandemic with its social simulation game titled “Animal Crossing: New Horizons” which has sold over 26 million copies since its release in March. Sales of its Switch and Switch Lite consoles have also improved dramatically during this period.
Nonetheless, the PS5 has created such a buzz with its launch that surely hasn’t gone unnoticed. It looks like it’s now on rival players to play a catch-up game with Black Friday sales likely offering a curtain raiser for the proposed showdown.
Game on, Gamers….
Looking for stocks with a surge to the upside?
Zacks just released a special report on the booming investment opportunities in legal marijuana.
Flamed by referendums and legislation, this industry is set to grow from the already robust $ 17.7 billion in 2019 to $ 73.6 billion in 2027. Early investors are ready to kill, but you must be prepared to act and know exactly where to look. .
See the jar stocks we are targeting >>