As we find ourselves nearly two and a half years into the current console generation, with the older PlayStation and Xbox consoles being phased out, the PlayStation 5 (PS5) and Xbox Series consoles have taken center stage in their respective ecosystems. Meanwhile, Nintendo enthusiasts anticipate the arrival of the Switch’s successor next year.
Supply issues for these consoles, largely due to global supply chain and production disruptions caused by the COVID-19 pandemic, are beginning to recede. As a result, the PS5 and Xbox Series consoles are finally receiving exclusive next-generation titles, signaling that they have reached full maturity.
At this point, we can begin to assess the PS5’s sales on their own merits and ask the crucial question: Will the PS5 outsell the PlayStation 4 (PS4) in the long run?
Each console’s sales are influenced by various factors, including market conditions, competition, and the performance of its predecessor. Though the PS4 sold 115 million units, this does not guarantee that the PS5 will achieve similar success. Several factors may contribute to the PS5 falling short of the PS4’s sales record.
One potential barrier to the PS5’s success is its higher entry point, which could deter mainstream consumers from purchasing the console. Additionally, the current global economic climate, marked by impending recessions and runaway inflation, may make the PS5’s price increasingly prohibitive for the mass market.
While Sony will eventually reduce the PS5’s price, the extent of this reduction remains uncertain. Over the last two years, console prices have generally increased, as evidenced by Nintendo’s OLED model and Sony’s decision to raise the PS5’s price in all markets except the U.S.
However, the PS5 faces more competition than the PS4 did. While Xbox has yet to pose a significant threat, the Nintendo Switch has proven to be a formidable competitor. Its continued popularity in major markets worldwide could impact the PS5’s sales.
Additionally, the increasing availability of PlayStation games on PC and third-party exclusives on PC and Switch may lead some consumers to opt for a PC instead of a PS5. While this is unlikely to sway the broader console market, it may result in a small but significant loss of potential PS5 buyers.
Despite these challenges, we believe that the PS5 is likely to match or exceed the PS4’s sales, primarily due to the longer expected lifespan of this console generation. External factors, such as the global economy and supply chain disruptions, may prompt Sony, Microsoft, AMD, and Epic to extend the generation to recoup investments and research and development costs. A longer generation would give the PS5 more time to make up for any shortfall in sales compared to the PS4.
Although the PS5 faces a more challenging environment than its predecessor, its success is still assured. Its longer generation and the enduring popularity of the PlayStation brand should enable the PS5 to at least match, if not surpass, the PS4’s sales figures. While it may not reach the heights of the PS2, DS, or Switch, the PS5 is on track to join the ranks of the PS4 and Game Boy in terms of sales success.
