TOKYO – Japanese players get the shortest point of the joystick as Sony Interactive Entertainment prioritizes US and other overseas consumers in its PlayStation 5 marketing strategy.
PS5 has had a shortage since Japan in November, which has frustrated many local fans. Sony did not push up the local inventory of the device, even during the end of the year shopping season, the hottest time for video consoles.
Even more pleasing to Japanese gamers is that Sony has stopped shipping all PS4 models except one.
The stock crisis was highlighted on January 1 when Tokyo’s famous electronics store put Yodobashi Camera PS5 units on store shelves, despite growing concerns about increasing cases of coronavirus in Japan. The pandemic has forced stores to make the popular game console mostly available via an online lottery. The industry has adopted the online lottery formula to prevent large crowds at stores and reduce the purchases to sell at a solid profit.
Japanese players were stunned in early January by the fact that Sony stopped shipping most PS4 models in Japan, while the Twittersphere erupted over the news. “It was earlier than expected,” a tweet said. “I have to buy PS5 now,” said another.
PS5 is still out of stock at many retailers in Japan.
In fact, Sony discontinued domestic shipments of three PS4 models as well as one version of the premium PS4Pro at the end of April 2020. In September, the company stopped shipping all but one of the PS4 models to retailers in Japan.
Sony is expected to take similar steps to phase out PS4 in overseas markets, but declined to offer details.
Sales of new game consoles usually follow a few years upwards before reaching a peak. PS4’s annual sales, launched in 2013 and reaching worldwide sales of more than 100 million units, peaked at 20 million units in fiscal 2016.
Even after PS4 came on the market, Sony continued PS3 until 2017 to ease the users’ upgrade pain. The company used the same approach to phase out PS4.
PS4 peripherals and games will remain on the shelves so Sony can reap the lucrative revenue stream. The company’s gaming industry is now a big earner thanks to recurring online gaming money paid by 46 million subscribers.
The decision to scale back the offer of PS4 before the PS5 launch is meant to encourage the upgrade of the new model, especially among PS4Pro users. This power game makes sense for Sony management, as the PS5 console is backwards compatible with most PS4 games – a big change compared to the transition from PS3 to PS4, which did not support earlier games.
But PS5 sales in Japan were sluggish, according to Japanese gaming magazine Famitsu, selling only about 266,000 units in the first eight weeks. This is about half that of PS4 over the same time frame and less than 60% of PS3, of which initial sales also benefited from the offer. Notably, PS5 sales barely increased during the Christmas and New Year shopping season.
But it’s by design because Sony’s focus on the North American market, where nearly 2 million units have already flown off the shelves, according to the website VGChartz, a gaming app. The company is facing stiff competition from new Microsoft Xbox consoles in the region, which is a deep offering PS5 there. According to VGChartz, about 1.5 million new Xboxes have already been sold in North America.
The latest Xbox also has a solid presence in Europe, where 700,000 consoles have been purchased since its November launch last year, compared to 1.6 million for PS5.
In contrast, Sony does not feel the heat in Japan. Despite relatively modest PS5 sales at home, sales of competing Xbox consoles have not been much better, according to Famitsu, so far only 30,000 have been sold. In other words, Sony does not have to worry about Xbox conquering the Japanese market.
Microsoft is also struggling to ensure a stable inventory of consoles due to a shortage of processing and graphics chips that plague most of the world. Game executive vice president Phil Spencer recently asked the head of Advanced Micro Devices – the US disc maker that produces both Xbox and PS5 – to keep up with demand. ‘I was on the phone last week [CEO] Lisa Su by AMD [asking] how do we get more? “Spencer said according to CNN.
AMD apparently can not keep up, because the demand for chips used in home entertainment is the result of the pandemic.
Both PS5 and Xbox depend on chips offered by AMD, such as the Ryzen central processing unit shown here.
Sony hopes to sell more than 7.6 million PS5 consoles worldwide by the end of March, breaking the PS4 record for the first year. The target appears to be within reach, as 4.5 million units have already been purchased, according to VGChartz.
Robust sales were also predicted for Japan, as consumers spent more time at home. But the supply shortage makes some Japanese gamers angry. More than a few have lost their passion for PS5, while others are migrating to computer games.
It shows that Sony’s strategy of pushing people to PS5 by aggressively phasing out PS4 could backfire at home.
The company still looks intact and launches another overseas PS5 ride in India on January 1 – hardly an encouraging sign for frustrated Japanese gamers and possibly indicating a significant loss of prestige and confidence at home.