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Consoles go on sale as the pandemic creates a massive increase in demand for games from people stuck at home and looking for a way to pass the time.
An employee of the consumer electronics retail chain Bic Camera works on the promotional display of the Sony PlayStation 5 game console and its game software, ahead of the game console’s official launch, in Tokyo, Japan on 10 November 2020. (Reuters)
Sony’s PlayStation 5 went on sale, just two days after rival Microsoft launched its newest Xbox, with next-gen consoles vying for dominance over the holiday season as the pandemic fuels demand for games.
With pre-orders pointing to a record launch, market leader Sony is counting on high-priced exclusive games like “Spider-Man: Miles Morales” to maintain the edge over its American rival.
With coronavirus cases on the rise in many countries, launch events are off the table and crowds of eager customers are out of the question.
READ MORE: Sony sees ‘very considerable’ PS5 demand ahead of launch
Ready… pic.twitter.com/doq67hsCzV
– PlayStation (@PlayStation) November 10, 2020
Massive increase in demand
While the new Xbox will hit stores worldwide on Tuesday, the PS5 will be available starting Thursday in Australia, Japan, Mexico, New Zealand, North America, and South Korea, but players elsewhere will have to wait until November 19.
In Sydney, only a handful of customers were picking up their reserved consoles Thursday morning.
“It’s Covid so I guess not many people want to rush to a launch,” Theo Pasialis said as he picked up his PlayStation.
Jonathan De Botton, a customer, said the atmosphere was a world away from the launch of the PS4, when lines of customers stretched to a shopping mall food court.
Today was “completely different,” he said.
“It was a midnight pitch … It was a good time,” he added.
Today, by comparison, it was “a kind of ghost town.”
Consoles go on sale with the pandemic creating a massive increase in demand for games from people stuck at home and looking for a distraction or a way to pass the time.
It’s not yet clear how long that boom will last, and this week’s news about the progress of a virus vaccine sparked a sell-off of the gaming sector on the stock markets as investors anticipated a return to normal life.
READ MORE: Sony plans to launch PS5 in time
A customer takes the PlayStation 5 console from the JB HiFi electronics store in Sydney on November 12, 2020 (AFP)
the lion’s share
For Sony, the stakes for its new console are significantly higher than for Microsoft, with games generating most of the Japanese company’s profits and about a third of its sales.
By comparison, games account for only 10 percent of Microsoft’s sales.
But Sony’s margin on the PS5 will be narrow, possibly even at a loss, analysts say, and the company will rely on online game sales, services and subscriptions to turn a profit.
Sony expects to sell 7.6 million PS5 consoles by the end of March, outperforming the PS4.
And it will rely heavily on the US market to achieve this, with Japan’s video game market more focused on mobile devices and still dominated by Nintendo, said Serkan Toto, an analyst at Kantan Games.
“You’re talking about a relatively small market in Japan … which is pushing Sony to centralize the PlayStation business in one area, and that area is the United States,” he said.
Toto said that he expected the PS5 to outperform the PS4.
“I think the PlayStation 4 was so successful that Sony has cultivated a much larger fan base for PlayStation content,” he said.
The PS5 is priced at $ 500, like the Xbox Series X, while a version without a disc drive costs $ 400.
That’s more than the $ 300 price tag of Microsoft’s less powerful Xbox Series S, which also doesn’t have a disc drive.
Source: AFP
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