PS5 cuts estimated production by 4 million units due to SOC yield challenges

The manufacturing process is harder than expected.

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According to Bloomberg, Sony has reportedly cut its estimated PS5 production for the current fiscal year by 4 million units. The Japanese company is now expecting to produce 11 million units by March 2021, says the report, as it has encountered “production issues with its custom-designed system-on-chip for the new console.”

The platform owner recently raised their orders, anticipating much higher demand for PlayStation 5 due to the coronavirus forcing more and more people at their homes during the Holiday season. However, it has met “manufacturing issues, such as production yields as low as 50% for its SOC, which has cut its ability to produce as many consoles as it wishes.”

“Yields have been gradually improving but have yet to reach a stable level,” added the source, but in the meantime, the output for the coming months could be compromised.

The news led Sony shares to lose gains and close down 2.4%, their lowest since July, and, according to analysts, these challenges could increase the component’s cost and weigh on profit margins, which were already expected to be rather limited.

Analyst Daniel Ahmad has added that this should be a major problem for supply during 2021 more than at PlayStation 5’s launch later this year, and that production yield “will always exist” although “this does seem more severe than expected.”

It’s not clear whether this could impact the incoming PlayStation event, which is slated for Wednesday, September 16. The event is anticipated to reveal the system’s price after Microsoft finally made its move last week.

Should pricing be impacted by these challenges, though, the wait might even be a little longer, and the presentation just focus on next-gen games.

With Xbox Series S at $299 and someone who’s already anticipating it to be the best selling next-gen Microsoft console around, Sony is currently under pressure to release PS5 and PS5 Digital Edition at an affordable price.

Bloomberg Intelligence analyst Masahiro Wakasugi expects the base model to be priced at $449, while the digital-only version should be below $400.