Could Sony (NYSE:
) ship a record-breaking number of consoles this holiday season?
, Sony anticipates that PlayStation 4 will reach annual shipments
of 16 million units in 2013. If true, this would make it the
largest launch of any console.
DigiTimes' sources claim that Sony will be begin
mass-producing the hardware in August. This mirrors a
previous DigiTimes report
, which indicated that Sony would begin assembling the new
machine in the third quarter.
Historically, console manufacturers do not ship a significant
number of units when hardware first becomes available. This is
heavily due to the limitations and the extreme costs involved in
producing new consoles.
Demand is also an issue. While none of the companies have
publicly stated that they have intentionally caused a shortage,
it is safe to assume that they would rather ship fewer units than
have them sit on store shelves.
Last fall, Nintendo (OTC:
) seemed to have a hit the jackpot when its newest console, Wii
U, arrived at retail. At the time, GameStop (NYSE:
) clerks at multiple locations informed Benzinga that the first
round of shipments had been accounted for. Many outlets had
waitlists with anywhere from 50 to 100 people who signed up to be
notified when additional units became available.
In an effort to avoid the shortages incurred by the original
Wii (and sell as many units as possible before Christmas),
Nintendo continued to ship dozens of Wii U units to every
This strategy ultimately failed. While the company had
to sell 5.5 million units through the end of this month, Nintendo
now believes that it will only sell a total of four million
Those numbers are very important for a couple of reasons.
First, it shows that even if Nintendo had met or exceeded
expectations, it would have taken the company five months
(November 2012 through March 2013) to sell more than five million
units. Second, by failing to achieve that expectation, Nintendo
will ultimately end up with a console that (on average) sells
less than one million units per month.
In order for Sony to sell 16 million PlayStation 4 units by
the end of March 2014, it would need the console to be four times
as popular as Wii U. Even if it is, the company could have
hardware sitting on store shelves if it ships too many units too
Logistically, the 16 million mark seems impossible to reach --
so impossible that you may want to question the wording of the
"Having high hopes on its PlayStation 4 (PS4) game console,
Sony internally expects the machine's annual shipments to reach
16 million units in 2013 with the supply chain expected to start
mass shipments in August, according to sources from PS4 component
This implies that Sony wants to ship 16 million units this
year. However, it could simply mean that Sony will ship enough
units this year to be on track for 16 million units every 12
months. This would mean that by fall 2014, Sony will have shipped
16 million PlayStation 4s.
Shipments are not the same as sales, so one could argue that
Sony will send millions of consoles to retail and hope for the
best. That would be nice for consumers who don't want to fight
massive crowds this holiday season, but it is unrealistic.
In order for Sony to ship 16 million units, PlayStation 4
would have to launch in most (if not all) regions this fall.
However, Sony execs
are unwilling to commit
to a 2013 release date for the European market.
Even if PlayStation 4 launches in all regions simultaneously,
16 million is an enormous number to achieve.
Consider how many PlayStation 2 units Sony shipped when the
console was released 13 years ago.
were available in North America. They were sold out in 24 hours.
promised to ship another 100,000 units
every week through the end of the year, though it is unclear if
Sony achieved this goal.
Before PlayStation 3 shipped in 2006, Sony allocated a mere
100,000 units for Japan and
for North American consumers. At the time Sony aimed to ship 1 to
1.2 million units by the year's end.
In 2007, Jack Tretton, President and CEO of Sony Computer
Entertainment of America, told
(formerly MSNBC.com) about the challenges of launching
"I don't think there's any question that there were missteps,
but I don't think anybody is being honest with you if they say
that the first year of any platform goes perfectly according to
plan," he said. "I think the biggest miss for us was the launch,
in that we had easily a million consumers in North America alone
that wanted to get their hands on a PlayStation 3 … and we had
roughly 200,000 units to take advantage of that demand."
Tretton's words indicated that the company fell short of its
goal of shipping 400,000 units domestically, but the company did
manage to ship and sell
one million units
by the end of 2006.
As impressive as that was seven years ago, it was a far cry
from 16 million units.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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