Sony Corp.’s PlayStation 5 video game console went on sale Thursday, a key test of the Japanese company’s ability to sustain its biggest growth engine during a coronavirus-era gaming boom.
The new PlayStation is Sony’s most important gadget since the Walkman, and it goes head-to-head with Microsoft Corp.’s next-generation Xbox over the holidays. The PlayStation 5 is anchored by the new Spider-Man game. Both consoles have chalked up solid sales since initial orders started in September, straining supplies.
The $500 PlayStation 5 – a version without an optical drive goes for $100 less — marks a watershed moment for a company once synonymous with Walkman music players and Trinitron TVs. It’s the first proper, new Sony console since 2013. Its predecessor, the PlayStation 4, sold 113 million units and transformed gaming into the most important part of Sony’s business.
Bloomberg reviewed the product over two weeks and found the most impressive aspect of the gadget wasn’t the eye-catching design or powerful innards but the controller, which added an entirely new dimension to play. It can, among other things, deliver a subtle range of vibrations that simulate different tactile sensations. (Microsoft’s Xbox Series X, on the other hand, is lacking must-have games.)
The PlayStation 5 won’t be easy to find in stores this year. Sony asked retailers to limit initial sales to customers with-pre-orders. Black-market PS5 resale values have already soared as high as $871, beating the Xbox, according to researchers. The bigger test comes next year, when Microsoft and Sony will try to reach beyond early adopters.
“As a core of the group, Sony must make the PlayStation 5 a success,” said Atsushi Osanai, a professor at Waseda Business School. “It’s the unit’s responsibility to become a cash cow for the sake of all the stakeholders.”
Sony has a lot riding on the console — even more so than the last one — in part because virus lockdowns introduced millions to console gaming on large-screen displays. Sony, Microsoft and Animal Crossing developer Nintendo Co. have become a key element of the so-called stay-at-home rally of social media and online entertainment stocks.
That has deepened Sony’s reliance on gaming, particularly as the pandemic hammers its movie and smartphone sensor business. Over the course of the summer, Sony saw record additions to its PlayStation Plus subscription service, required for online multi-player gaming. During the April to September period, the PlayStation business represented more than 40% of Sony’s operating profit, the company’s data showed. Bloomberg Intelligence’s Masahiro Wakasugi said the PlayStation 5 should ignite a fresh round of growth.
For the product’s debut Thursday, the company is committing one of its biggest entertainment properties: a new game starring the superhero from the Sony-produced movie franchise Spider-Man. The game, Spider-Man: Miles Morales, is a semi-sequel to the 2018 blockbuster, both of which received critical acclaim. The new game strives to be culturally relevant (though not overtly political). It features a Black hero, a diverse cast of supporting characters and a version of Manhattan that includes a giant Black Lives Matter poster.
Now that both new consoles are out, Sony and Microsoft have to resolve supply bottlenecks that linger from the pandemic. The Japanese company had struggled to ramp up production even just weeks before launch, spurring a decision to ship consoles to the U.S. via air, an expensive option for a device already sold as a loss leader. In Japan, local retailers complained the amounts that they’ve been allocated are far from enough, forcing Sony to resort to a lottery system to distribute available units.
Sony Chief Financial Officer Hiroki Totoki said on a private conference call with analysts last month that the PlayStation 5 was facing production and logistics bottlenecks. He told attendees Sony would have announced a bolder sales goal for the device’s first fiscal year if the company had been able to meet demand, several people who joined the call said. The Japanese company has said it would sell more than 7.6 million units — the amount its predecessor sold in its first fiscal year — by the end of March 2021.