Ever since the PS5 and the Xbox Series X launched in late 2020, there have been consistent supply issues that led to the consoles being extremely difficult to come by. Sony and Microsoft have promised to bump up production and get more consoles out there, but unfortunately for gamers, the shortages are only going to get worse as the world’s semiconductor chip shortage has reached a critical point.
This microchip crisis goes beyond gaming consoles as analysts expect other industries to get hit with setbacks. Things are so bad that Samsung said it might postpone the launch of its next Galaxy Note phone.
The cause of the chip shortage can be traced back to the source of a majority of the world’s problems this past year: the COVID-19 pandemic. The pandemic caused chip factories to shut down and the Chinese supply chain to falter.
In turn, this forced car manufacturers to slow down production as vehicle sales dipped and the chips that were already made went off to other companies. But as conditions improved, the economy stabilized and manufacturers got back into the swing of things. The demand greatly surpassed the supply and now, companies are scrambling to buy and make chips.
Neil Campling, a media and tech analyst at Mirabaud, said, “There is a perfect storm of supply and demand factors going on here. But basically, there is a new level of demand that can’t be kept with, everyone is in crisis and it is getting worse.”
Caught Between a Rock and a Hard Place
As of this writing, Apple is the leading buyer for the semiconductor chips squeezing out the competition.
Mike Spencer, Head of Investor Relations at Microsoft, had to admit the Xbox supply will be low until at least June.
And Sony said it might not be able to meet its hardware sales goal for the year. Yet, despite the hardware issues, Sony and Microsoft both actually managed to make a profit. Microsoft profits went up 33% and Sony broke records.
Campling said, “There is no sign of supply catching up, or demand decreasing prices are rising across the chain.”
Neither Sony nor Microsoft has said the prices of the consoles would rise; in fact, in all the decades since their release, the PlayStation line and the Xbox line never saw an increase in price.
Scalpers have been particularly brutal this console generation as some have started to use bots to buy up online listings faster than anybody else. Walmart released a blog post in December 2020 stating that it blocked over 20 million attempts by bots to buy PlayStation 5s in a single half-hour stretch.
Scalpers who manage to get their hands on a console, in turn, resell on eBay and Facebook for ridiculous markups. Usually, scalpers double the prices, but in some cases, people have seen PlayStation 5s advertised for $5,000.
Unfortunately, we’ll need to wait even longer before the dust settles.
What I’d like to know is, what have your experiences been like? Were you lucky enough to snag a PS5 or Xbox Series X?
Also, if you liked this article, check out this one on Sony downsizing the PlayStation stores which have older consoles.