My fight with my family for a PS5

At the end of this month, family negotiations over the purchase of a PlayStation 5 will enter their 600th day of deadlock. Reaching this milestone may well bring all parties back to the table, but a breakthrough still seems a long way off.

Part of the delay is due to global economic forces playing havoc with equities, of course. But this is by no means our first version of this argument. As each generation of enchanting consoles (particularly those from Sony and Nintendo) arrives, the question of the cost-justification of the new machine revolves around several talking points.

Is it really better than the one you already have? (Absolutely, yes, the existing model is now decade-old technology and just look at Game X.) OK, but is it worth $500 when games are also $60? (Well, yes. See previous answer.) Really? And yet you complain about the cost of children’s sneakers. (Yes, but that’s totally different.) And so on. The support, this time, of a gruff 12-year-old kid in my lobbying effort was helpful, but not decisive.

But the main difference between this and previous iterations of the argument has been the PS5 itself. In Japan, Sony’s home territory, its gaming machine was very difficult to buy from a mainstream retailer. Normally, there’s an initial rush after launch, and the ensuing shortages are all part of the hype (and fun). Within a year, however, the casual buyer can usually find one without spoiling their quest too much.

Not so with this iteration of the PlayStation. Launched in November 2020, despite the well-known headwinds of a global semiconductor shortage, it was rocked by supply chain difficulties. Sony, which has a real battle against Microsoft’s Xbox, has channeled its machines into particular markets, primarily the United States, where it believes victory will be decided.

Japanese supplies have therefore been exceptionally thin, and since the start of the year there have only been three weeks where Sony has sold over 30,000 units here. In an extraordinary week in May, Sony sold just 2,693 PS5s in Japan – an indication analysts said the supply crisis may actually be getting worse. Japanese gamers determined to secure a machine must rely on in-store lotteries, luck, or a secondary market where “like new” used PS5s are trading for 70% above the official retail price.

This nonsense killed the debate in our house. Since its launch, the PS5 has been through two Christmases and several Lewis family birthdays, both much-desired and defiantly unbought.

Sony may have an interest in keeping sales in Japan low. Calculated globally, it makes little money on hardware sales of PS5 units – no problem, considering the real money is made on software. In Japan, says an analyst who has covered the company for decades, it probably makes a loss of around 2,000 yen on every machine sold.

Pelham Smithers, another veteran Sony watcher, suspects the red ink spill could be even more serious, with material costs rising dramatically amid global inflation and high energy prices, and with the yen plunged to its lowest level in 20 years. This combination, Smithers says, could mean Sony is losing around 15,000 yen on every PS5 sold in Japan. This could prompt him to ensure that stores and online retailers are not inundated with machines. Sony’s games chief recently announced “a significant ramp-up” of PS5 production this year, but for now I’ll have to settle for our PS4 – itself the result of a round of negotiations successful family.

Leo Lewis is the FT’s Asia business editor

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