While it is already very difficult to get a PlayStation 5, the situation is not going to get better in 2022 according to Sony. Same observation at Nintendo, where the Switch will be available in more limited quantities than last year. In question, the shortage of semiconductors which does not dry up and which, according to forecasts, will impact the financial result of the two companies for the current year.
Demand greater than supply
11.5 million PlayStation 5 and 23 million Nintendo Switch were sold during the fiscal year which ended on March 31, 2022. For the Sony console, available since the end of 2020, it is difficult to draw conclusions in terms of sales. On the Nintendo side, the Japanese company has seen a 20% drop in the number of sales of its console compared to 2020. The situation is not going to improve, the two giants of the video game industry are revising their estimates in terms of machine sales for the current year.
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The shortage of semiconductors which makes it difficult to produce consoles is the first cause mentioned. Nintendo CEO Shuntaro Furukawa is sorry and says he doesn’t see the end of this shortage coming for a while. Sony’s chief financial officer, Hiroki Totoki, makes the same observation. Since 2020, the company has been unable to meet the demand for the PS5, which is much stronger than the supply. The advantage for Sony is its ability to sell all the consoles produced explains the wall street journal.
The two Japanese companies are also worried about the health situation in China, where the confinements, in particular in Shanghai, have had an impact on the production of chips. If conditions were to deteriorate, sales forecasts would be revised downwards. At the moment, Nintendo estimates it can sell 21 million Switches by the end of the fiscal year. Sony is setting a target of 18 million PlayStation 5s, up from 2021.
Nintendo and Sony bet on games
Despite the production problems, the two companies remain in very good financial health. At PlayStation, the company can count on sales of console video games which will represent 29% of the industry’s turnover in 2022 according to the latest report from Newzoo. It also announced an investment of 300 million dollars in the development of the games and plans to release them on other media, such as the PC. Sony was able to count on its branches dedicated to cinema, music and electronic devices to maintain itself in 2021 by reaching 9.2 billion dollars in turnover.
For Nintendo, the shortage could further weaken the income of the Japanese firm, which depends almost exclusively on video games. It will sell fewer consoles in 2022 but it has 107 million Switches already installed in homes. This solid position should allow Nintendo to sell 210 million games during this fiscal year according to its latest financial report (pdf). Nintendo thus plans to reach a turnover of 2.6 billion dollars. Mario’s dad can count on strong licenses like Pokémon, the most lucrative franchise, which will see a new game arrive at the end of 2022.