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1 year ago
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With this current generation now being almost two and a half years in, and the older PlayStation and Xbox consoles being phased out, the PS5 and Xbox Series consoles have officially taken front and centre as far as console sales in those two ecosystems go (Nintendo fans will have to wait until next year for the successor to the Switch, by all accounts).
As of right now, these consoles are the primary consoles PlayStation and Xbox sell; their supply issues, which were protracted and lasted for almost two years, in no small part due to the global supply chain and production disruptions in the havoc wreaked by COVID-19, are beginning to recede. They are, finally, almost thirty months after first being introduced, beginning to get some great, next-gen exclusive titles.
This means that as of right now, these machines are in the full swing of things. Or they should be, but Xbox is struggling, in part due to a lack of supply for the higher end Series X console (which seems to be what the market wants more of, rather than the cheaper, lower end Series S), and in part because Microsoft has thus far failed to make a convincing case to buy the Xbox Series consoles that has resonated with the broader market (this comes down to the lack of must have games, but that is an oft had discussion that this is not the place for).
But the PS5, the PS5 is now finally hitting its stride. As Sony’s flagship console at the moment, it is selling with all the momentum, volume, and pace that a successful PlayStation console in the prime of its life does. We are, finally, past all the caveats of generation transitions, launch shortages, and the COVID disruptions, and we can finally start to assess PS5 sales on their own merits, and ask the obvious question: is PS5 going to outsell PS4 in the long run?
Every company obviously wants every new system to do better than the last one, but that situation is inherently unrealistic – there are only a finite number of customers in the addressable market, and only finite resources. Just because your previous product sold a certain amount does not mean that the follow up will match or exceed it. And, in fact, the games industry is filled with such examples – Nintendo went from 154 million units of the DS sold to 75 million units for 3DS; Sony went from 156 million PS2s, to 80 million PS3s. And, on the flip side, we see reversals in the opposite direction, such as the Switch selling more than 120 million units (and counting), coming right after the Wii U, which sold under 14 million.
Put simply, each console’s sales are ultimately a product of the circumstances and broader market conditions that it finds itself in, and the performance of a predecessor, while certainly instructive, has limited use in informing discussions about how successors or subsequent follow ups might do. In other words, just because the PS4 sold 115 million, it does not necessarily mean the PS5 will do that as well.
There is a reasonable (though not overwhelmingly likely) chance that the PS5 ends up falling short of the PS4’s final tally. If this were to happen, it would come down to a fair few factors – the PS5’s higher entry point will serve as a barrier for the broader mainstream to adopt the console, once the enthusiast rush dies down (the broader mainstream market is what takes a console from being reasonably successful, like the Xbox One or Nintendo 64, to being a 100 million plus massive success, like the PS4 or Nintendo Switch, so it cannot be ignored in this discussion). Especially given the context of the broader global economy, and how it continues to circle the drain with more impending recessions, and runaway inflation, the PS5’s price could end up being more and more prohibitive as the mass market constitutes a larger and larger portion of the system’s sales.
Of course, Sony will by then reduce the price – but by how much? The PS4 never got a major permanent price drop (it went down from $399 to $299 and then stayed there), and in general, it appears the broader strategy across the market right now is to hold console prices to the extent possible, outside of some smaller, limited time promotions or offers. In fact, one could even argue the industry is likelier to increase prices rather than drop them right now – just in the last two years, we saw Nintendo increase the price of the Switch $50 via the OLED model, and we saw Sony go one step further and raise the price of the PS5 by $50 in all markets around the world except the U.S., without revising or updating the hardware.
Assuming, however, that at the very least a PS4-style cadence of price drops and discounts is possible, the PS5’s price should not be a significant deterrent in the long run. It will certainly be a factor for some proportion of its would-be buyers, but on the whole, it shouldn’t factor in as much.
What does factor in is that the PS5 is fighting in a far more crowded field than the PS4 ever did. The PS4’s competition was the Wii U, which is one of the worst selling consoles of all time, and the Xbox One, a console that fumbled its launch so badly, the brand is still trying to recover from the aftereffects to this day. Eventually the Switch launched, and the PS4 did have to content with it, but the Switch launched three and a half years after the PS4 did; it had a clear playing field for almost half its life.
The PS5, on the other hand, is facing… well, it’s still not facing any meaningful competition from the Xbox side of things, to be fair, but it is facing far more credible and meaningful competition from Nintendo and the Switch. Now in its seventh year, the Switch is putting forth an unprecedented run of sales, and continues to routinely divert customer spending towards it over the PS5 in most major markets even now. Without getting the chance to be the only console there is any meaningful customer spend towards in markets such as Japan, France, Germany, Italy, Spain, Canada, or even the UK, the PS5’s sales pace is naturally impacted to at least some degree by the presence of the Switch. Assuming the Switch can maintain its momentum until whenever Nintendo decides to launch the successor, the PS5 may never get a totally clear playing field to itself, which by definition reduces the slice of the addressable market that it gets to sell to for itself.
And while some nonsensical classifications by the CMA in the UK may have ruled that Switch is not really competing with the other two, ultimately that’s not really true, especially not at the broader level of mainstream sales necessary to achieve the kinds of scales we are discussing here. Millions of people bought a cheap PS4 to play Minecraft and Fortnite and FIFA; right now, if they can, instead of a $550 PS5, get a $200 Switch and still get to play those games, plus other mass market friendly games such as Mario Kart or Animal Crossing or Pokemon, then they absolutely will pick that cheaper option with more games that appeal to their segment. Yes, the Switch versions look or run worse, but they obviously don’t care about that. If the performance or graphics were a consideration, the Switch would never have sold that much to begin with.
There is also the fact that there will certainly be some level of “spillage” of the customer base for PS consoles with the PS5; put simply, with Sony porting their games to PC with a frequent regularity now, and third party PS exclusives increasingly available on PC and Switch, there may be many who decide they simply don’t…need the PS5, and that what they do want from it can be addressed with a PC; the PC getting an increasingly console-like experience thanks to innovations such as the Steam Deck also means that PC gaming is no longer as intimidating or friction inducing as it once was. While the broader console market is never going to be swayed by PC gaming, no matter what Valve or anyone else does, a small but significant chunk might be – and that might be what keeps the PS5 from reaching PS4 numbers
All of this might make it sound like the PS5 is not going to match or exceed the PS4, but as I mentioned, it’s likelier that it does than not. At the very least, I think matching the PS4 is a given. Fundamentally, I think this will come down to one reason – while the factors I mentioned previously all hold true, I think collectively, they won’t actually impact the PS5’s final tally that much. I can see it shedding some 10-15% of its audience from the PS4, which would still bring the console in the 100-105 million units sold range; and that difference, I think, can be easily covered up for by the fact that I think this is going to be a longer generation than the previous ones.
While the past two PlayStation generations have both been seven years long each (eight and seven years for Xbox), I think this generation is going to go on a bit longer. The aforementioned geopolitical and global circumstances, such as the economy, the supply chain and shortages, the pandemic, all of that, I think, means that Sony, Microsoft, AMD, and Epic will all want to keep this generation going a bit longer than usual so they can recoup their investments and R&D costs better. This is not at all unprecedented – we already saw this happen in the Xbox 360 and PS3 era, which went on eight full years before their respective successors were introduced (as opposed to the 4-5 year window for new console generations that had been the norm until then), because of the 2008 recession severely impacting and disrupting market dynamics globally. Sony very literally just needs to keep the PS5 going for 1-2 years more than the PS4; meaning, not introduce the PS6 until 2028 at the earliest, and maybe even 2029; and that 10-15 million projected shortfall compared to the PS4 is easily accounted for right there; in fact, that is probably enough for the PS5 to mount a small lead over the PS4 of its own.
All of which is to say, while the PS5 faces a far more challenging environment than the PS4 ever did, I think its broader success is assured, and that it will manage to at the very least match the PS4’s final numbers, if not exceed them, regardless. This comes down to a longer generation for it, yes, but also because of the sheer brute force of its success, and the success of the PS brand as a whole, where even with so many difficulties, the PS5’s sales pace has not been blunted nearly enough to have any real impact. While it is unlikely the PS5 will match the PS2, DS, or Switch, we can, at the very least, expect it to end in the same tier of sales as PS4 and the Game Boy – and that’s a very great success for it regardless.
Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.
