Sony To Make About 27% Fewer PlayStation 5 Consoles Due To Chip Constraints: Report

Sony Corporation SNE has cut production estimates of its PlayStation 5 console for the current financial year by 4 million, down to 11 million, Bloomberg reported Monday.

What Happened: The Japanese electronics giant’s plans to increase orders with its suppliers hit a roadblock, as it faces manufacturing hurdles like production yields for its system-on-a-chip (SOC) slipping to 50% lows, people familiar with the matter told Bloomberg.

The Tokyo-based conglomerate reportedly had upped its manufacturing projections due to an uptick in its PlayStation Plus subscription service and robust summer sales of “The Last of Us: Part II” and “Ghost of Tsushima” games.

The production yields have been gradually improving, according to Bloomberg's sources.

Why It Matters: Sony is expected to release the pricing for the new console at a video presentation due Wednesday, noted Bloomberg.

Nintendo Co, Ltd NTDOY is planning to release an upgraded version of its Switch console, which will support 4K output in 2021, Bloomberg reported.

A major Sony rival, Microsoft Corporation MSFT, has already revealed the pricing of its new Xbox Series S console, which is priced at an estimated $299 per unit and will be released on Nov. 10. 

Price Action: Sony shares closed 0.9% higher at $77.72 on Monday and gained 0.84% in the after-hours session.

Photo courtesy: Sony Corp.