Sony reduces its PlayStation 5 production forecast due to SoC issues

Reports suggest that Sony has run into some manufacturing issues with the PlayStation 5's custom SoC, which may lead to fewer PlayStation 5 sales.

According to a Bloomberg report, the company is seeing yields as low as 50 percent. This has led to Sony reducing its production forecast by 4 million units, bringing its target down to 11 million units to be manufactured by March 2021, otherwise known as the end of the fiscal year. 

Earlier this year, Sony upped its PlayStation 5 production capacity, expecting high demand for it during the holidays season and for a few months afterwards, in part due to the ongoing pandemic. If demand is as high as Sony is anticipating, this could be quite the problem for the console manufacturer. 

According to Bloomberg, yields have been gradually improving but they haven't yet reached a stable level so there's no guarantee that production will catch up in time. Problems with SoC yields aren't unusual by any means but it does mean that stock may be lower and each component may end up costing Sony more, affecting profit margins.

Notably, when the news broke, it led to Sony's shares closing down 2.4 percent in response. The news also comes at a time when we still don't actually know a huge amount about the PlayStation 5.

While Microsoft finally announced pricing details last week, Sony has continued to be cagey about its plans. However, it will hold a 40 minute PlayStation 5 showcase tomorrow live on Twitch and YouTube which should reveal more about the games coming to the system, as well as hopefully a price. Microsoft has already announced pre-orders for its console will begin September 22nd and it's fairly competitively priced with two versions available - the Xbox Series X and Xbox Series S available for £449 and £250 respectively, with payment plans also an option for those that want to spread the cost.

We do know that two PlayStation 5 models will also launch but there's no sign of when yet other than 'Holidays 2020' and the all-important price has yet to be unveiled. 

Hopefully we'll find out more late tomorrow and it may help distract from the news that stock may be a little more limited than Sony was counting on.