If in March reports from Redeye analysts believe that the video game industry could benefit from the restrictions imposed to combat the Covid-19 pandemic, now A new report has been distributed which this time affirms that the situation Health Alert to Slow Generational Debut holding back initial sales for the PlayStation 5 and Xbox Series X consoles, scheduled to arrive in the last months of the year.
China's production and distribution situation is likely to be problematic
Niko Partners has forwarded a report to investors assessing the video game market Ahead of the upcoming Christmas campaign: They fear that Sony and Microsoft may be limited in their ability to supply units to stores, which will curb the revenue initially generated by these new consoles.
And is that 90% of console production is in China And this supposes, at the moment, several problems: outbreaks of the disease could force to close factories again or impose restrictions on the volume of employees, which would slow down the volume of production. Even if this does not happen, the volume of distribution may be less than expected due to the restrictions on merchandise traffic in the affected countries.
Component prices are expected to increase to offset February's manufacturing slowdown
In fact, the report points to a third element: changes in the production capacity of Chinese factories as a whole annually, after the slowdown in February -when production stopped in the country- it could mean an increase in component prices. A potential consequence of that is that companies order fewer units of essential components (such as RAM memory) waiting for more favorable prices that do not affect its profit margin, producing fewer total units; or that they are forced to increase the final pricess to offset the extra cost.
"The component shortages and logistical problems They will increase the production costs of the new consoles that are slated to debut this year, "said Daniel Ahmad, the senior analyst responsible for the report." At the moment it is pIt is likely that Sony and Microsoft can set prices below $ 400 without taking significant losses. "This forecast by Ahmad is aligned with other reports by recent analysts, who estimate that prices will be around $ 450 to $ 499.
The horizon of economic recession will also be conflictive
"As noted in the report, delays in games, the recession that is brewing, higher console prices and intergenerational titles from the first year will mean there are fewer incentives for current console users to make the jump initially, "the analyst concludes.
In this way, even if none of the production and distribution problems are as serious as these analysts foresee, what seems certain is that the economic recession that is causing the industrial slowdown resulting from the measures to try to save lives means less availability of money and confidence in the economic future in families. The economic recession will imply a lower volume of sales of multiple products nonessential, and consoles are between them.
