TOKYO – Japanese gamers are getting the short end of the joystick as Sony Interactive Entertainment has prioritized US and other overseas consumers in its PlayStation 5 marketing strategy.
PS5 has been in short supply in Japan since its release in November, frustrating many domestic fans. Sony hasn’t ramped up the device’s local offering, even before the end of the shopping season, the hottest time for video consoles.
Even more annoying for Japanese gamers is that Sony has stopped shipping all but one PS4 model.
The stock crisis was highlighted on Jan. 1 when the famed electronics store Yodobashi Camera in Tokyo put PS5 units on its shelves, despite growing concerns about rising coronavirus cases in Japan. The pandemic has forced stores to largely make the popular game console available through an online lottery. The industry has adopted the online lottery formula to avoid large crowds in stores and reduce purchases to resell at hefty profits.
Japanese gamers were stunned by a message in early January that said Sony had stopped shipping most PS4 models in Japan, with the Twittersphere erupting over the news. “It was earlier than expected,” said a tweet. “I have to buy PS5 now,” said another.
PS5 is still out of stock at many retailers in Japan.
In fact, in late April 2020, Sony stopped shipping three PS4 models and one version of the premium PS4Pro domestically. In September, the company stopped shipping all but one PS4 models to retailers in Japan.
Sony is expected to take similar steps to phase out PS4 in foreign markets, but has declined to provide details.
Sales of new game consoles generally rise for a number of years before they peak. Annual sales of PS4, which launched in 2013 and achieved worldwide sales of more than 100 million units, peaked at 20 million units in fiscal 2016.
Even after PS4 hit the market, Sony continued to ship PS3 until 2017 to ease upgrade issues for users. The company has taken the same approach to phase out PS4.
PS4 peripherals and games will remain on the shelves, so Sony can continue to reap the lucrative revenue stream. The company’s gaming business is now a big earner thanks to recurring online game fees paid by 46 million subscribers.
The decision to scale back PS4’s offering ahead of the PS5’s launch is meant to encourage upgrades to the new model, especially among PS4Pro users. This power play makes sense to Sony’s management as the PS5 console is backwards compatible with most PS4 games – a big change from the transition from PS3 to PS4, which didn’t support previous games.
But PS5 sales in Japan have been mediocre, with only about 266,000 units sold in the first eight weeks, according to Japanese gaming magazine Famitsu. This is about half that of PS4 in the same time frame and less than 60% of PS3, whose initial sales also suffered from a lack of supply. Sales of PS5 in particular barely increased during the Christmas and New Year season.
But this is designed this way, as Sony is targeting the North American market, where nearly 2 million copies have already flown off the shelves, according to VGChartz, a game information website. The company faces stiff competition from new Microsoft Xbox consoles in the region, necessitating a large supply of PS5 there. About 1.5 million new Xboxes have already been sold in North America, according to VGChartz.
The latest Xbox also has a solid presence in Europe, where 700,000 consoles have been purchased since its launch in November, compared to 1.6 million for PS5.
Sony, on the other hand, doesn’t feel the heat in Japan. Despite relatively modest home PS5 sales, sales of competing Xbox consoles haven’t been much better, with only 30,000 sold to date, according to Famitsu. In other words, Sony doesn’t have to worry about Xbox taking the Japanese market.
Microsoft is also struggling to secure a stable supply of consoles due to a shortage of processing and graphics chips that plagues most of the world. Gaming Executive Vice President Phil Spencer recently asked the chief of Advanced Micro Devices – the US chipmaker that supplies both Xbox and PS5 – to keep up with demand. “I was on the phone with last week [CEO] Lisa Su at AMD [asking] how do we get more? Spencer said according to CNN.
AMD apparently can’t keep up as the demand for home entertainment chips is soaring due to the pandemic.
Both the PS5 and Xbox rely on chips provided by AMD, such as the Ryzen central processing unit shown here.
Sony hopes to sell more than 7.6 million PS5 consoles worldwide by the end of March, breaking the PS4 sales record for the first year. The target seems within reach given that 4.5 million units have already been purchased, according to VGChartz.
Robust sales were also forecast for Japan, as consumers spend more time at home. But the supply shortage irritates some Japanese gamers. More than a few have lost their passion for PS5, while others have migrated to PC games.
This shows that Sony’s strategy of pushing people to PS5 by aggressively phasing out the PS4 can backfire at home.
Still, the company seems unfazed, launching another foreign PS5 drive in India on Jan. 1 – hardly an encouraging sign for frustrated Japanese gamers and perhaps a sign of a significant loss of prestige and confidence at home.