Sony Reportedly Making Costly Moves To Get More PS5 Consoles On Store Shelves
Similar to Nintendo before launching the Switch, Sony is choosing a more costly shipping method to ensure there's enough PS5 consoles at retail for launch.
We've already seen that players are extremely anxious to get their hands on the PS5, with preorders going out of stock almost immediately on September 16. Sony is anticipating high demand for the PlayStation 5 this holiday season, with video game sales up in 2020 due to the COVID-19 pandemic. So much so that it's planning to speed up shipments to the US via air freights.
According to Daniel Ahmad, an analyst at Niko Partners, Sony has already scheduled numerous flights with PS5 stock for the US in order to meet retail demand for the next-gen console over the holidays. Ahmad states that he isn't sure whether it is 60 flights, or 60 planes worth of flights being readied, but that this method of shipping will incur a bigger cost to Sony over traditional shipping via the sea.
This is identical to what Nintendo did back in 2017 to meet the growing demand of the Nintendo Switch at the time. The company absorbed the additional cost in order to ensure 2 million Switch units were available to retail ahead of its launch in March of that year, which was only disclosed a few months later in an earnings report.
Back then, it was estimated that the cost of this shipping was around $45 more per unit. In Nintendo's case, however, its profit margins can continue to get larger as the cost of components go down, as it has kept the Switch at $300 for over three years, including during Black Friday. Consoles often sell at a loss from launch as-is; it's not clear what the margins are on the PS5 as of yet.
Sony are using air freight to ensure that PS5 can meet demand / supply enough units— Daniel Ahmad (@ZhugeEX) September 14, 2020
The company has booked 60 flights from October (Delta 747) to ship consoles to retailers. This supply is expected to last through the quarter
Air freight is faster than sea, but more expensive.
Currently, we know that the company is preparing two versions of its console: one with a disc drive and one without. This is different to Microsoft's strategy, with the Xbox Series S not only removing the disc drive but also shipping with less powerful components for a drastically reduced price of $300. In Sony's case, there is only a $100 difference between its standard PS5 and the digital version.
The PS4 has been a huge seller for Sony, shifting over 112 million units since its launch. That makes it Sony's second best-selling system, behind the PS2 (157.68 million). Sony has pledged to keep supporting the previous console for years to come.
If you're yet to secure your preorder of a PlayStation 5, consider consulting our PS5 preorder guide.
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