Xbox vs. Playstation: how component shortages reinvigorated Microsoft

Faced with a shortage of electronic components needed to manufacture their home consoles, Microsoft and Sony implemented two opposing strategies. On the one hand, Sony will continue production of its Playstation 4 until the end of 2022, while it had originally planned to stop it in 2021. On the other hand, Microsoft discreetly stopped production of Xbox One S, the latest model of its console, at the end of 2020. old generation still on the market. Why these divergent approaches?

The Xbox Series S supplants the Series X
The ‘next generation’ consoles from the two manufacturers, Xbox Series and PS5, launched in November 2020. The launches were marked in both cases by significant stock shortages that continued throughout 2021, including Christmas (although it was a little). easier to find the Xbox Series S). While demand for Sony’s console was initially double that of the Xbox Series X/S (the PS5 had the biggest start in industry history), the shortage ended up benefiting the Xbox Series X/S.

Microsoft is now focusing on the production of the Series S, the entry-level model of its console, which is not equipped with the same processor as its big brother and does not have a disk drive. “In fact, we can produce more Series S chips on the same wafer as Series X chips,” the Xbox boss told The Verge. A strategic choice, combined with the promotion of the Xbox Games Pass Ultimate cloud gaming service, which is paying off with scarcity.

The PS5 too expensive to manufacture
Sony, on the other hand, couldn’t afford to stop PS4 production as it had planned at the end of 2021, and will make about a million in 2022 to make up for the lack of PS5s on shelves, Bloomberg has learned.

If the Japanese manufacturer like Microsoft has a basic model for PlayStation 5, it has chosen to keep the same key components in both versions. The main difference between the PS5 “digital edition” and the standard edition is that it doesn’t have a Blu-ray player. The economic aspect also comes into play, the rise in the price of components makes the PS5 difficult to monetize.

In the current context of the semiconductor market, Microsoft’s strategy has proven to be the most resilient. However, it is not assumed that it will take over Sony in the medium term. The PS4 sold roughly twice as much as the Xbox One in the previous generation (blamed, among other things, on Microsoft’s underperformance since launch) and the demand for the PS5 remains higher than for the Xbox Series. As for Nintendo, it also remains cautious, with production of its various Switch models being strained with strong demand that does not waver.

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