Msft to completely stop Xbox Series production for the quarter & Sony to halve production after lower-than-expected sales during xmas. Take with 🧂🧂

[Gamernyc78]

「吃粽子前可以洗洗睡」筆電出貨不樂觀，業者：上半年很不好過…這領域卻異軍突起、谷底翻揚- 今周刊

科技中下游業者先前熱烈期待2024年能夠一掃2023年的陰霾，不過今年一開年，業界便充滿各種壞消息，今年科技產業的景氣究竟如何？

www.businesstoday.com.tw

That's what businesstoday is claiming based on information from suppliers.

Machine translation:
Not only laptops, but also consumer electronics, the demand is extremely bleak. It is understood that the two major game console manufacturers, Sony PlayStation and Microsoft Xbox, both faced the challenge of lower-than-expected sales and excessive inventory during the Christmas season last year. In order to clear inventory, Sony has notified its supply chain, including assembly plant Hon Hai, and power supply manufacturers Delta Electronics and Lite-On, that PlayStation orders will be cut in half in the first quarter of this year, from about one million units per month. , lowered to 500,000 units, and Microsoft also informed assembly plants Pegatron and Hon Hai, and power supply manufacturers Qundian and Lite-On that "Xbox production will be completely suspended in the first quarter."

 

[Thirty7ven]

They put PS5 and Xbox in the same bag for Christmas sales performance when that didn’t happen, also cutting production in half? really? 1.5 millions for the quarter that seems unlikely.

 

[Gamernyc78]

They put PS5 and Xbox in the same bag for Christmas sales performance when that didn’t happen, also cutting production in half? really? 1.5 millions for the quarter that seems unlikely.

Very true. I also thought twice about the "half" situation.

 

[Evilnemesis8]

Better to wait for the Jan/Feb reports for UK/EU/US and such to get a better idea for us casuals.
There's just too much unknown and language barrier with this article.
It also needs you to understand the landscape of Taiwan's production and all.

I don't think any of us have that kind of expertise nor do we know just how many assembly plants are being used and/or which of them are what size.

 

[Bryank75]

This is a very dubious source.

I don't know if there is any credibility or if it's just rumor. I think we need to wait for Sony to officially say something...

 

[Gamernyc78]

This is a very dubious source.

I don't know if there is any credibility or if it's just rumor. I think we need to wait for Sony to officially say something...

The halve part makes it not sound right. We shall see.

 

[Shmunter]

This would be very bad for ps5 pro prospects. Let’s hope it’s clickbait

 

[Batzy]

It sounds like both still have stock and demand is low. Nonexistent for xbox even with current rumors about.

 

[Satoru]

While I don't think think this source is credible, I wouldn't be surprised if PS sales start dropping more than expected. They not only have fuck all to show when it concerns their first party studios (not their publishing arm), but they are also porting to PC. We were right about MS and Gamepass, and we will be right about this.

 

[Bryank75]

The halve part makes it not sound right. We shall see.

Especially since, from what I have seen. Sales are still very strong.

Sure January is down (in UK) on last year but December last year had constraints, so much of last year's demand was just people who couldn't get one before Christmas.

I think if Sony do cut production, it's not really a demand issue.... It's them limiting themselves.

 

[Bryank75]

While I don't think think this source is credible, I wouldn't be surprised if PS sales start dropping more than expected. They not only have fuck all to show when it concerns their first party studios (not their publishing arm), but they are also porting to PC. We were right about MS and Gamepass, and we will be right about this.

Yup, if demand has dipped, PC ports and lack of first party exclusives definitely is a big part of that.

Of course things like Fortnite, COD and other big games are in decline too as far as I can see.... There's no real groundbreaking new game apart from Palworld having it's five minutes.

 

[Impulse]

They put PS5 and Xbox in the same bag for Christmas sales performance when that didn’t happen, also cutting production in half? really? 1.5 millions for the quarter that seems unlikely.

If you are planning to sell 200 units per month at a best buy store, you don't manufacture and supply 200 units exactly because if all 200 units sell then you are out of stock and empty shelves give a bad impression.

Instead you supply somewhere between say, 250-300 units, adding safety stock on top that will cover the store until you get to resupply.

Now take this on a far larger scale, you expect to sell 1.5m units to consumers in Q1, so you manufacture and supply something like 2.0m-2.7m (because you have to keep all stages of the supply chain stocked up). There's a more detailed way to calculate it but that's just the broad strokes.

The reason they are cutting in half is because the supply channels still have leftover stock from the Xmas period, plus they had a changeover between regular and slim. You want all chunky ps5s out of stores before you begin mass supplying new units, overstock is death because retailers would demand big discounts to clear inventory (which is what happened to Xbox in Dec).

 

[Gamernyc78]

If you are planning to sell 200 units per month at a best buy store, you don't manufacture and supply 200 units exactly because if all 200 units sell then you are out of stock and empty shelves give a bad impression.

Instead you supply somewhere between say, 250-300 units, adding safety stock on top that will cover the store until you get to resupply.

Now take this on a far larger scale, you expect to sell 1.5m units to consumers in Q1, so you manufacture and supply something like 2.0m-2.7m (because you have to keep all stages of the supply chain stocked up). There's a more detailed way to calculate it but that's just the broad strokes.

The reason they are cutting in half is because the supply channels still have leftover stock from the Xmas period, plus they had a changeover between regular and slim. You want all chunky ps5s out of stores before you begin mass supplying new units, overstock is death because retailers would demand big discounts to clear inventory (which is what happened to Xbox in Dec).

Very true possibly that left over stock from holidays.

 

[nongkris]

They not only have fuck all to show when it concerns their first party studios (not their publishing arm), but they are also porting to PC. We were right about MS and Gamepass, and we will be right about this.

Yep, all the 2024 problems you listed mixed with 2023 being the year they fixed their stock worldwide, demand is bound to be lower. I'm sure every company is trying to clear out their inventory.

UK Sales Jan 2024 (GSD) : PS5#1(-17%) X/S#2 (-7%) NSW#3 (-31%) / EA FC 24#1 TLOU2R#2 MW3#3

UK Sales January 2024 2.47 million games were sold in January in the UK, a drop of 3% over the same period last year. This is based on GSD data, which tracks all physical game sales, and all digital sales from most major third-party publishers. The sales were led by EA Sports FC 24. EA's...

icon-era.com

 

[Impulse]

If you are planning to sell 200 units per month at a best buy store, you don't manufacture and supply 200 units exactly because if all 200 units sell then you are out of stock and empty shelves give a bad impression.

Instead you supply somewhere between say, 250-300 units, adding safety stock on top that will cover the store until you get to resupply.

Now take this on a far larger scale, you expect to sell 1.5m units to consumers in Q1, so you manufacture and supply something like 2.0m-2.7m (because you have to keep all stages of the supply chain stocked up). There's a more detailed way to calculate it but that's just the broad strokes.

The reason they are cutting in half is because the supply channels still have leftover stock from the Xmas period, plus they had a changeover between regular and slim. You want all chunky ps5s out of stores before you begin mass supplying new units, overstock is death because retailers would demand big discounts to clear inventory (which is what happened to Xbox in Dec).

As an addendum to the above, you see all those massive discounts on Xboxes, reaching up to %35-50? Microsoft likely paid for all that.

Like if a $299.99 Xbox series S went down to a $150.00 bundle with a free headset, Microsoft is paying the difference to the retailer! So in this case they are paying $149.99 per discounted unit sold, plus whatever the free stuff costs! Not to mention the damage to future sales (if I saw something go down to 150, would I even consider buying for 300?)

Overstock like that is fucking death in retail and Sony doesn't want to be in a similar situation even if the magnitude is reduced.

 

[Satoru]

Yep, all the 2024 problems you listed mixed with 2023 being the year they fixed their stock worldwide, demand is bound to be lower. I'm sure every company is trying to clear out their inventory.

UK Sales Jan 2024 (GSD) : PS5#1(-17%) X/S#2 (-7%) NSW#3 (-31%) / EA FC 24#1 TLOU2R#2 MW3#3

UK Sales January 2024 2.47 million games were sold in January in the UK, a drop of 3% over the same period last year. This is based on GSD data, which tracks all physical game sales, and all digital sales from most major third-party publishers. The sales were led by EA Sports FC 24. EA's...

icon-era.com

It's genuinely incredibly disheartening seeing Sony just throw away this gen. They managed to push Xbox away, and can now be the only place to play games in the living room. What do they do? They port one of the biggest incentives to own their consoles onto a platform that just disperses development and QA efforts, and decide that the path forward is to release 457 live service games.

As far as PS Studios (not publishing arm) is concerned, 2024 has... ZERO games. ZERO. And people are whistling. Now add to that the piss poor QA on their first party games (Spider-Man 2) and published games (Helldivers 2) and... do the math. They've been taking the piss and it's now starting to catch up to them.

 

[shrike0fth0rns]

This would be very bad for ps5 pro prospects. Let’s hope it’s clickbait

Doubt that. At least initially pro sales depend on hardcore console gamers who are usually early adopters and have had their ps5s the longest. The sale of base ps5s slowing down has nothing to do with their buying habits. Also this is probably nonsense

 

[J_Paganel]

Yup, if demand has dipped, PC ports and lack of first party exclusives definitely is a big part of that.

Of course things like Fortnite, COD and other big games are in decline too as far as I can see.... There's no real groundbreaking new game apart from Palworld having it's five minutes.

Ports to torre... PC, bad management policy that killed Days Gone 2 (a new successful IP that could have had a sequel NOW), and possibly affected other releases we don't know about, stopping partnerships with Japanese developers (Sony stopped the exclusive partnership with Sega\Altus\RGS), it has had consequences already.

And instead of news about new IPs from Sony, the information space is filled with "PC PC PC, new PS game on PC" and "Sony games on Steam Deck".

This is also a blow to potential buyers who wanted to buy a PS5 but have now changed their minds.

I wouldn't be surprised if the theoretical PSP 3.0 is crushed not only by Switch 2.0 but also by SteamDeck 2.0, which will get Sony games and other additional features.

 

[Nhomnhom]

Cut the price by $100 and double the production, why are they scared? If they play their cards right they can bury Xbox right no regardless of what MS intends to do.

Yup, if demand has dipped, PC ports and lack of first party exclusives definitely is a big part of that.

Of course things like Fortnite, COD and other big games are in decline too as far as I can see.... There's no real groundbreaking new game apart from Palworld having it's five minutes.

Sad that we were right again, following the natural flow of things PS5 should end up selling way more than PS4 if it doesn't it is because of PC ports.

 

[Yurinka]

I highly doubt PS5 underperformed in Christmas seeing the numbers we had, and even less that they would decrease production in half. I'd keep it as a non-credible rumor.