Sony reportedly cut estimate for PlayStation 5 production

In this photo illustration the PlayStation 5 logo seen displayed on a smartphone.

Rafael Henrique | SOPA Images | LightRocket | Getty Images

SINGAPORE — Shares of Japan’s Sony fell following a report that the company is reducing its estimated production for its PlayStation 5 gaming console.

The stock fell 2.41% on Tuesday after seeing declines or more than 3% earlier during the trading day.

The moves came after Bloomberg reported, citing people familiar with the matter, that Sony slashed its estimated PlayStation 5 production for the fiscal year by 4 million units. The report said the reduced outlook was related to production issues with the custom-designed system-on-chip (SOC) for the console. 

Bloomberg said the Japanese electronics powerhouse has been facing manufacturing issues, with production yields as low as 50% for its SOC.

Sony did not immediately respond to CNBC’s request for comment.

Kazunori Ito, senior equity analyst at Morningstar Investment Management Asia, told CNBC in an email that the reported reduction from 15 million to 11 million is “still the largest shipment number on the year of launch” as compared with past platforms.

“If Sony can really ship 11 million for this fiscal year, we do not think the shortfall will be critical,” Ito said, adding that the market’s focus will be on pricing as well as the pipeline of games.

The latest development comes as Sony gears up for its next-generation console battle against Microsoft. The rival recently released pricing details for its new Xbox consoles which are set to launch in November.

While Sony has not yet announced pricing details for the PlayStation 5, the PlayStation blog is teasing a showcase scheduled for Wednesday.

In May, Sony said the PlayStation 5 was still on track for release in time for the looming 2020 holiday season despite the “challenges” caused by the coronavirus pandemic.

The video game sector has been among the industries that has seen a boom amid the ongoing pandemic as more people stay at home. In August, Nintendo reported a more than 400% on-year surge in operating profits in the April-June quarter.


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