Sony (SNE) PlayStation 5 and Microsoft (MSFT)’s Xbox Series X are two of the most powerful gaming consoles ever built. It is also almost impossible to get hold of.
If you’re a gamer or have tried in your life to buy a console for a gamer, you know that the PS5 and Series X will sell out within seconds, when it’s on sale. Whether it’s scalpers that use automated bots to grab any available consoles online or retailers with minimal inventory, the consoles are apparently just as elusive as Big Foot.
The problem? The same problem plagues every other industry on Earth that depends on semiconductors: a global shortage of chips caused by a huge increase in the demand for chips, as consumers search everything from computers to TVs for work and entertainment during the pandemic.
But there’s good news for gamers out there, and some bad news. The good news is that chip and console manufacturers are working to bring more systems to the public as quickly as possible. The bad news? It will probably still be just as difficult to find until at least the second half of the year.
Fast sales, and great demand
Sales of the latest generation of consoles have been strong for Sony and Microsoft since they launched their systems in November. Sony sold 4.5 million PS5s in the third quarter of 2020, the first quarter of the console available. Microsoft, which is not breaking out of unit sales of Xbox hardware, rose 40% in its first quarter of 2021.
“It’s always a challenge to supplement enough supply to meet the initial demand for next-generation consoles,” Jon Erensen, senior director of research group Gartner Technology and Service Provider, told Yahoo Finance.
“This time with Sony and Microsoft starting at the same time … it was even more challenging because of some of these issues we saw around the pandemic and around the chip supply,” he added.
Both Microsoft and Sony say they are pushing out as many consoles as possible, with Jim Ryan, chief executive of Sony Interactive Entertainment, saying in November that all of the company’s stock had been sold out.
‘Everything is sold. “Absolutely everything is sold,” Ryan told the Russian publication Tass. ‘I’ve been trying a lot over the last year to make sure we can create enough demand for the product. And now … I’m spending a lot more time trying to increase supply to meet demand. ‘
A Microsoft spokesman, meanwhile, told Yahoo Finance the technology giant was working with its retail partners to replenish its systems as soon as possible.
So when can you expect consulting needs to start opening up to more customers? According to AMD CEO Lisa Su, there should be more production capabilities for its chips in the second half of the year. For gamers, this means they may have to wait as long as Q3 2021 to get their hands on the latest consoles.
Slide makers can’t keep up
Every major industry you can think of depends on semiconductors. Our world is slipping – whether it’s the medical industry, the computer industry or the automotive industry.
But the coronavirus pandemic has slumped the world economy. While people around the world stayed at home to stop the spread of the virus, they started buying electronics. According to IDC, computer sales grew by 13.1% in 2020, the most in a decade.
“It’s fair to say that overall demand has exceeded our planning,” Su said during AMD’s Q4 2020 earnings call. ‘And as a result, we had some supply constraints when we ended the year. It would be mainly in the PC market, on the low side of the PC market and in the gambling markets, I would say. Both Microsoft and Sony use custom AMD chips in their latest consoles.
“The industry does need to increase overall capacity levels,” Su added. “And so we see a bit of tightness during the first half of the year, but there’s extra capacity in the second half.”
According to Erensen, the drastic increase in the demand for consumer electronics has caused chip makers, who have limited capacity at their factories to meet their customers’ needs, to drop.
“They are all fighting for the awards they need,” Erensen said. ‘But there is not enough to go around. So you see a shortage, not only in the game console, but you also see that shortages have an impact on all sorts of different markets. ‘
This is an unfortunate disappointment. But hopefully supplies will open faster so more gamers can play the most popular games to pass the time during the waning days of the pandemic.
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