Imagine this: you’re going to your big grocery store nearby and hoping to buy a PlayStation 5, and it’s just there. It’s on the shelf. You can pay for it, you can leave the store with it and it’s yours. It is not necessary to sit through the browser tabs at your desk all day long. Sounds pretty cool, right?
On November 12, 2020, Sony released the PS5 in a handful of markets, with a global release next week. Four months later it is stay over almost impossible to get one in hand – a shortage you can chalk up to a perfect storm of scalpers, production hiccups and one unprecedented global pandemic. Worse, the situation shows no signs of abating and may continue even in the latter part of summer.
“The primary challenge here is the shortage of semiconductors that affect basically everything in the world, from cars to computers to graphics cards to PS5s,” said Mat Piscatella, executive director and video consultant at the NPD Group, told me recently during a Zoom call. “It looks like it’s going to be a challenge for a while, probably until the second or second quarter, or even later, depending on a number of factors.”
Like the Harvard Business Review set out last month, the shortage of semiconductors / chips is the result of the pandemic. Last year, fires mainly shut down two major manufacturing plants in Japan: one that manufactures fiberglass (used in the construction of computer parts) and one that manufactures electronics. The automotive industry also played a role. When the pandemic weakened for the first time last year, limiting millions to the home, carmakers reduced orders on virtually all production parts, including chips, which are essential components in many modern cars. When the journey of the vehicle picked up again later in the year, the same companies increased orders for chips. And then there’s Donald Trump, who fucked things up royally kickstarting a trade war that is not well advised, regulation the sale of American-made semiconductors to China-based companies (which forced those companies to stock up), and directed the federal government to blacklist China-based Semiconductor Manufacturing International Corporation.
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In addition, as HBR points out that air freight has experienced significant constraints in recent months, due to a number of factors, including the main priority of sending covid-19 vaccines, the decline in passenger travel across the board (which means that companies use flights to send stock), and the February foundation of a Boeing fleet.
Now, turn around all this in a global pandemic that has increased the supply chain in too many ways to list. You can start to see how the production of the most anticipated game console on the market came to a standstill.
The PlayStation 5 uses a chip developed by Advanced Micro Devices (AMD), a California semiconductor manufacturer that manufactures graphics cards, processors, and more. (AMD did not respond to a request for comment Kotaku.) Earlier this year, AMD CEO Lisa Su tell CNBC that the company expects a shortage of chip production at least the first half of the year. As report by Tom’s Hardware, Su said so much during an AMD earnings call from January.
‘Production lines can produce just as many units per hour. The allocation of production lines that can build things like a new console is not infinite. So we have seen that every successful new console in the past has a shortage of some kind, usually during the first six months to a year. But this is only because demand always exceeds production capacity significantly. We will therefore continue to reach capacity limits. “At the moment, these chips are an extra low capacity challenge,” Piscatella said. He further pointed out that the number of new consoles currently being made does not differ much from previous console generations. The most important contrast is that at this point in the cycle you can usually point to some kind of increase in production. This is not the case this time. (Piscatella could not provide specific numbers due to data agreements between console manufacturers and NPD.)
But hey, the White House is sitting on it. Last month, President Biden reached out an order to review the causes of this semiconductor shortage. The short version is that this order, pending the outcome of the review, will basically lead to the United States producing more semiconductors domestically. It remains to be seen if this amounts to anything at all. According to research carried out by consulting firm McKinsey, it could take up to two years to create a semiconductor plant, plus at least another year or more to increase production.
So what does this mean for you and your potential PS5? That dream, where you can just walk into your local Best Buy – or Target, or GameStop, or Walmart, or wherever – and buy a PS5 off the shelf? When does this happen?
Sony did not say. A Sony representative said they would investigate the matter after reaching for comments on the regular availability of the PS5 – at least according to the company’s estimate.
Piscatella is slightly more optimistic: “If nothing else goes wrong, then hopefully in August, September, we will see a little more stock for people.”
Now let’s say that you’re seriously itching for a digital PS5, and that in the meantime you happen to have a model with a disk drive. (This also applies to those who are in a reverse situation.) This is probably the best way to grab the first model you encounter.
‘I do not know if people will be able to choose and approve [between models], especially over the next six months, ”Piscatella said. “If they want one, they’ll just have to grab whatever they have available, because it’s not going to stop soon.”
In other words, the PS5 is, just like all of us and everything, until the whims of 2020 Part II: 2021.
“Hopefully at some point this year they will be on a shelf somewhere and you can just pick one up,” Piscatella said. ‘But you know, 2021. Chaos reigns. Everything is uncertain. ”