Did The Chip Shortage Derail The PS5?

Did The Chip Shortage Derail The PS5?

In the gaming world, the release of a new console, especially by one of the big three (Sony, Microsoft, or Nintendo), has the whole gaming world on notice. Nintendo tends to have a more considerable audience in the East, whereas Sony and Microsoft dominate the market in the West. 

However, that’s not to say all three haven’t achieved global recognition and popularity.

Many mitigating factors ensure the release of a new console is a success, and the first chapter of that is the early hype the company generates. In early 2019, Sony announced they would release the PlayStation 5 toward the latter stages of 2020, giving themselves ample time to generate immense publicity.

The Success Of The PlayStation 4

Considering it had been six years since the release of the PlayStation 4, some in the industry had accused the colossal Japanese gaming behemoth of dragging its feet when releasing the new console. However, this boils down to the fact that the PlayStation 4 was a phenomenal success. Therefore, creating a new console was not too high on the agenda whilst the PlayStation 4 was selling so well.

The PlayStation 4 ushered in a brand new era of highly profitable gaming. It streamlined the online gaming experience and provided a platform for eSports to flourish into the enormous market it is today. While eSports followed a similar model to pre-existing online gaming tournaments, once you enter the tournament, you have to play until the end or until you are eliminated. 

It follows a similar framework to that of online poker tournaments, for example, whereby you enter and sit through the game’s duration until you’re eliminated from the competition. You can play poker tournaments for free, or you can play for cash against other people worldwide, much like the option you have for PlayStation tournaments.

Although poker tournaments have different rules, where you can come and go, the most popular Texas Hold’Em or fast-paced sit-and-go poker tournaments involve sitting through the game’s duration, which is usually less than an hour. Of course, depending on your eSports game preference, these tournaments can be considerably longer or shorter. Still, they’re supplemented by an enormous gambling market that has emerged due to the popularity of these tournaments.

How Chips Deflated The Party

In hindsight, Sony probably picked one of the most inopportune moments of the 21st Century to coordinate the release of their mega-fifth installment. A lot of the unforeseen overheads that have arisen have caused a colossal issue. Still, the lack of chips has caused supply chain and demand problems, and it’s stifled the momentum in a critical period where Sony wanted to explode back into the market. 

Obvious factors such as the pandemic caused a halt in chip production, and it also fuelled the excessive demand, which was also worsened by cryptocurrency miners using the chips to mine Bitcoin. In addition, economic factors such as the price of neon skyrocketing to more than triple its price again caused a considerable strain on the sector.

Ultimately, many combined factors resulted in a considerable problem for huge sectors, not just the video gaming industry. Still, it deflated any initial excitement that the console seemed to generate, and the scarcity of the console initially helped fuel hysteria but began to act as a detriment.

Other Factors To Consider

Although the chip shortage caused a seismic issue in the supply and demand of the PlayStation 5, it’s by no means the only thing that has caused Sony to lose some ground on their latest invention. Other external economic factors, such as a cost of living crisis and high inflation across Europe and the West, have contributed considerably to fewer people being able to afford the console. 

Sony responded to the inflationary pressures by increasing the console price by 20%, which has, again, cut into their bottom line and resulted in fewer people being able to purchase it. So it’s not just the chip shortage that has caused a dent in Sony’s enthusiasm for the newest console, but other factors that are out of their control. 

While the Japanese gaming colossus has a wide range of free games you can download to help gamers during these tough economic times, the weight of such an economic downturn has caused an overall negative impact on the profit projections.


The global climate has changed significantly over the last 2 to 3 years. Sony has released all their other consoles during relatively stable economic times across the West and East, and this is new territory.

This is the first real global crisis many multinational gaming companies have faced, and the PlayStation 5 hit our shelves at the height of these stormy conditions. A perfect storm of dire economic conditions, inflation, and underlying chip shortages has resulted in a deflated atmosphere regarding the PlayStation 5. 

It might experience a resurgence if these costs decrease and the global economic outlook becomes more positive, but it still looks like it’ll be a slow-burning output for at least the next twelve months.