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The PS5 is now over a year old, which means at this point we have at the very least a better than rudimentary idea of the system's inherent market appeal, broader, extenuating, and otherwise circumstances that may influence how it does in the market, and of course, a year's worth of data and sales trends to extrapolate from. Put simply, I feel like more than a year since the system's launch is not a bad time to ask this question.
The question, of course, being about what the PS5's final sales total may look like.
The interesting thing about the PS5 is how much into unprecedented territory we are at this point. No other company ever has maintained five straight generations of "traditional" home consoles appealing to the core enthusiast market; no successful console ever has launched at more than $399; plus, of course, COVID and its knock on effects create further uncertainties in the market.
Before asking you to commit to an answer in the poll, I figure I will give you a primer and a recap of some considerations that I feel will have an impact (positive or negative, it remains o be seen) on the system's market performance in the long run.
- Manufacturing constraints: This is the most obvious one, because more than a year into the now current generation, it's clear that manufacturing constraints (induced by COVID-19 and its related disruptions on the global logistics and supply chain) have essentially become the current go-to story for these new consoles, with constraints induced chronic shortages having become an ongoing state of things for the PS5 across both its SKUs. These manufacturing constraints aren't limited to just the PS5 or even just video games and computers, of course, with industries such as automobiles and appliances seeing the adverse impacts of these issues as well, but pertinent to the matter at hand, these manufacturing constraints obviously severely limit the market availability of the PS5, at the very least relative to its true market potential. These constraints and shortages won't last forever, and eventually it will be possible for one to walk into a store and buy a PS5 - the question is, will the console bleed a least some of its addressable market before it gets there?
- Pandemic and economic recession: This one is obviously self explanatory. The great thing from the perspective of analyzing sales performance so far is that the leisure sector seems to have benefitted positively from the pandemic and economic recession, with sales of all consoles, subscriptions to services such as Netflix, and more, having seen increases across the board; so inasmuch as the pandemic figures into this assessment (beyond, obviously, the logistics and manufacturing disruptions it has caused), its influence appears to be positive, not negative.
- Record breaking sales and demand (at least at launch): It is important not to get too lost in the hypotheticals. At least as things stand right now, the PS5 has had a record breaking launch in most regions and markets across the world. The real world performance for the console, at least a year in, speaks for itself. With so many extenuating circumstances (such as the aforementioned manufacturing constraints) thrown into the mix and for the PS5 to still at least keep pace with, if not outright out do, the PS4 (one of the fastest selling consoles of all time) speaks volumes to just how strong the initial demand is. Such strong demand, obviously, in turn indicates stronger long term performance as well.
- Potentially longer generation?: Another potentially positive factor to consider is that this generation of consoles may end up being longer than the now-seven-year norm. Remember, the last time a generation was extended was because Microsoft and Sony needed more time to recoup enough money on their initial investment to have made said initial investment worth it to begin with. Now, the PS3 and Xbox 360 were both major and massive loss leaders, which is not true for any of the PS5 or Xbox Series SKUs to the same degree - while I am sure some of them are sold at at least some loss, it is presumably nowhere near the insane bleeding that the PS3 and Xbox 360 induced. However, even in the absence of self inflicted upfront losses, the manufacturing issues, supply chain disruptions, and ensuing disruption to achieving economies of scale and critical mass install base, among other things, may cause this generation to last longer than the last two; in which case the PS5 gets more time on the market to sell.
- High price: The PS5 has launched at a higher price than any mass market console before; $499 is not a price point that has been associated with a particularly successful console in the past. Now, of course, once more, we need to learn to not live in the hypotheticals too much - while one may or may not make arguments from both sides of the argument as to whether or not the market at the moment is more accepting of higher prices, we have real world performance, numbers, and data to look at - and they tell us that the PS5 price, for either SKU, has not been an issue at all. The market finds that to be a justified price for the system; moreover, it does leave some potential for price cuts for the system in the future once it does achieve economies of scale, presumably coinciding with a "Slim" revision.
- Stronger competition: The PlayStation console line's strongest successes have come when the competition fumbled and dropped the ball completely; the PS2 went up against the diminutive Gamecube and Xbox, and the PS4 went up against the Xbox One and Wii U (arguably among the worst self inflicted wounds by a platform holder in modern console history). While every PlayStation console ever has done exceptionally well in the long run, the best results come when the competition completely drops the ball. The PS5 however does not face off against a competition that has dropped the ball; Nintendo is arguably the strongest it has been since the entry of Sony into the market with the current state of the Switch, and Xbox has mounted a marvelous turnaround for the brand and its momentum over the last few years, with Xbox Series a far more attractive proposition for the market than the Xbox One ever was. How does this stronger competition factor into the PS5's long term prospects, if at all? That remains to be seen.
- Japan: Okay, elephant in the room - Japan. Even though PlayStation performance in Japan has declined and contracted catastrophically from the PS1 and PS2 heyday, the country still contributed ~10 million units of sales to PlayStation with the PS3 and PS4. However, the PS5 currently appears to be performing worse across the hardware and software fronts than any recent major console in memory; while one should never underestimate Sony's ability to pull back from troubled launches to at least some extent, whatever they do here, there will be at least some appreciable and noticeable loss against the 10 million baseline they have set for themselves over the last couple of generations. And this, of course, is without even counting the other knock-on second- and third-order effects something like this may have, from any loss of third party support (either in the guise of exclusives no longer remaining exclusives, or games outright skipping the ecosystem), and the impacts that may have on the system's long term appeal (plus even longer term considerations of a brand slowly driving itself to near total irrelevance in a country that till accounts for a larger portion of global console game production than any other market). Of course, none of the games we are discussing the may fall under the purview of this consideration really command a large enough audience by themselves; the question is if, collectively, they could conceivably cause further hits to the PlayStation install base in addition to the hits it will already take from the lost Japanese sales.
