When Sony's (NYSE:
) released PlayStation 3 in 2006, the company shipped a mere
to America. This was
half the number of units
that Sony had expected to ship. At the time, Sony estimated that
there were one million consumers vying for those consoles.
To prevent another system shortage from occurring, Sony was
rumored to bring
16 million PlayStation 4 units
to retail in 2013. Not all of these consoles would be allocated
to the United States, but a significant number would surely come
stateside, preventing a repeat of the PS3 debacle.
That was just a rumor, however. Now, just weeks before the
2013 Electronic Entertainment Expo, another rumor is
contradicting the last one.
, Sony "may have trouble achieving shipments of 12-16 million
units in 2013 as expected, as the related upstream supply chain
has not yet received any shipment instructions from the
Japan-based vendor, implying a possible delay in the game
console's mass shipment schedule."
Even in the best-case scenario, it seemed hard to believe that
Sony would ship 16 million units.
Hardware manufacturers traditionally ship a few hundred
thousand units to each territory (Japan, Europe, the United
States, etc.) before flooding retailers with an overabundance of
consoles. In doing so, they can increase demand (or make it
appear that demand is higher than it actually is) and prevent any
excess units from sitting on store shelves.
) pioneered this strategy when it created the first massive
system shortage in 1996. At the time, Nintendo shipped a very
limited number of Nintendo 64 units, creating a shopping frenzy
as consumers rushed to get one before Christmas.
In 2006 -- 10 years after Nintendo 64 arrived at retail --
Nintendo found itself in a similar situation even after shipping
millions of Wii consoles. The demand was so great that the system
continued in 2007
, particularly around the holiday shopping season.
If PlayStation 4 proves to be even more popular (and thus in
higher demand), Sony could easily produce and sell 16 million
units during the console's first year of release. In a quarter,
however, that is not possible.
First of all, game consoles are not smartphones. They are not
adopted and replaced overnight. While there may be
eight million people
who are already interested in buying PlayStation 4, it will take
time before Sony can persuade 16 million individuals to open
Thus, even if Sony could manufacture 16 million units this
fall, it is very unlikely that the company will ship all of them
Louis Bedigian is the Senior Tech Analyst and Features Writer
of Benzinga. You can reach him at 248-636-1322 or
louis(at)benzingapro(dot)com. Follow him
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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