Sony CAN'T Kill the PS5

[00:00] - After six months of talking

[00:03] it is officially here.

[00:05] Switch 2, $50 more expensive,

[00:07] PS5 and Series X, $150 more.

[00:10] Now, Valve haven't raised

[00:12] because it's been out of stock for months.

[00:14] I mean, look, this is not

[00:17] The older a console is, the

[00:20] So where is my dang price drop?

[00:22] The answer is not

[00:25] The result is that PS5 sales are tanking

[00:28] and this is directly

[00:31] When asked how the RAM crisis

[00:32] will affect the PlayStation business,

[00:34] Sony's CFO immediately pivoted to the PS6

[00:37] with, quote, "We have not

[00:40] we will launch the new

[00:43] Not a, "We don't comment

[00:46] They are publicly telling investors

[00:48] that the chip shortage is causing them

[00:49] to rethink their next generation plans.

[00:51] This points in one big direction for me.

[00:54] The current generation of hardware

[00:55] isn't going anywhere anytime soon.

[00:58] As bad as prices are now,

[01:00] it looks like things

[01:01] before they get better.

[01:02] The reason for all of this

[01:05] AI data centers are absorbing

[01:06] the world's supply of memory, storage,

[01:08] and quickly CPUs and GPUs as well.

[01:11] This has caused prices to

[01:14] as the few foundries actually

[01:16] have pivoted to where

[01:19] You know what we don't have enough of?

[01:21] Data centers.

[01:21] PlayStations? (scoffs) No

[01:24] Who needs Switches?

[01:25] I just need more data centers in my life.

[01:28] But it's not just the RAM crisis

[01:30] that companies have to deal with.

[01:31] Back in April 2nd of last year,

[01:33] Nintendo famously announced

[01:38] Now, this was an unpopular decision.

[01:39] Myself and many others

[01:42] But the real story was what

[01:45] The US slapped massive tariffs

[01:47] on, well, basically everything

[01:50] and absolutely the Switch

[01:52] Now, this really caught

[01:55] That night, their president

[01:58] that their $450 price tag was decided on

[02:01] without factoring in

[02:04] Now, this caused Nintendo

[02:07] and openly consider whether or not

[02:09] they actually needed to raise the price

[02:10] before they shipped a single console.

[02:12] Now, ultimately, they did

[02:16] probably 'cause they had already committed

[02:17] to making millions and

[02:20] which did enable one of the

[02:22] of all time.

[02:23] A year on, it's clear

[02:26] Within the first couple of months,

[02:27] Switch 2 stock was plentiful

[02:30] a far cry from earlier Nintendo launches

[02:32] where consoles were hard to find

[02:33] for sometimes years after launch.

[02:35] Well, except the Wii U.

[02:37] No one gave a (beep).

[02:38] - [Alex] Hey!

[02:39] - You know what?

[02:40] The Wii U did sell out,

[02:42] but once it got restocked, it never moved.

[02:44] But with tariffs still not

[02:47] Nintendo have run into another problem:

[02:49] the same RAM crisis the entire

[02:52] At this point, both Sony and

[02:55] by a full $150,

[02:57] and meanwhile, every time

[02:59] about price hikes,

[03:00] up until this point, they basically say,

[03:02] "Nah, we good, fam.

[03:03] Don't worry about it."

[03:04] And then suddenly,

[03:06] with everything else being more expensive,

[03:07] that $450 price tag

[03:10] However, they have finally given in.

[03:13] Believe me, I am not gonna sit here

[03:14] and tell you that price

[03:17] But something to know about Nintendo

[03:19] is that unlike Sony and Microsoft,

[03:21] they extra traditionally

[03:23] at a small profit.

[03:24] But thanks to all of this,

[03:25] they're supposedly selling the Switch 2

[03:27] at a pretty significant loss

[03:29] and the investors have been really

[03:30] hammering Nintendo over it.

[03:32] So the fact that they only

[03:35] it's not as bad as it could have been,

[03:37] and they're giving everyone

[03:39] The price doesn't hit

[03:42] giving you nearly four months,

[03:44] as opposed to Sony,

[03:45] who gave everyone less than a week

[03:47] before hiking the PS5 price.

[03:49] The other interesting story here

[03:50] is Nintendo's other forecast.

[03:52] They're expecting to sell

[03:53] just 16.5 million Switch 2s the next year

[03:56] compared to analyst estimates

[03:58] of over 20 million.

[04:00] So, essentially, Nintendo

[04:02] "Yeah, we're raising the price

[04:04] and, yeah, we are gonna

[04:07] Now, I kind of get it.

[04:08] I mean, even for a big

[04:11] losing a significant amount of money

[04:12] on each console that goes

[04:16] but they kind of don't

[04:19] Xbox at least has the Series

[04:23] Nintendo, they only have the

[04:26] which is absolutely showing

[04:29] Not to mention they're

[04:31] in some regions for the second time.

[04:34] So what can they do?

[04:36] Well, I think there's an obvious answer.

[04:38] Give us the Switch Lite 2.

[04:40] We demand the Lite life.

[04:42] I want a Switch Lite 2.

[04:44] Give me a Switch Lite 2.

[04:45] The more times I say this,

[04:47] the more I'm going to

[04:49] Look, here's the thing.

[04:50] As I've discussed many

[04:52] the best version of the Switch.

[04:53] It was the cheapest, it was the smallest,

[04:55] it was the cutest,

[04:56] which is the only thing I care about

[04:57] when I'm buying consoles.

[04:59] The original Switch Lite

[05:01] after the original.

[05:02] So if Nintendo are gonna

[05:05] we're looking at 2028,

[05:06] and I personally think that's a long time

[05:09] to ask people to pay $500

[05:13] All things being considered,

[05:14] I actually do think Nintendo

[05:16] I mean, especially if

[05:18] of Switch 2 games going, like

[05:22] I mean, people who want a Switch 2

[05:24] are still going to mostly buy one.

[05:26] Now, PlayStation, PlayStation

[05:31] Sort of? Maybe?

[05:32] Oh, they don't. Oh, oh, no.

[05:35] Their recent earnings call was brutal.

[05:37] The PS5 had its worst quarter of all time,

[05:40] down 46% compared to last year.

[05:43] This means that the PS5 is

[05:46] where the PS4 was at this

[05:49] by a full 3.3 million consoles.

[05:52] This is a very different problem for Sony.

[05:53] I mean, sure, the pandemic supply chain

[05:56] caused a lot of issues

[05:58] but as recently as a year ago,

[06:00] the PS5 was trending ahead of the PS4.

[06:02] There is a very clear culprit.

[06:04] The price has been massively hiked.

[06:06] I mean, the PS5 now costs $650,

[06:09] a full $150 more than it did last year,

[06:12] and the PS5 Digital is worse.

[06:14] It is now $200 more expensive

[06:16] than it was when it launched back in 2020.

[06:19] For a console that's taken five years

[06:21] to finally hit its stride,

[06:23] this is a really, really bad look.

[06:25] In their investor brief,

[06:26] they discuss how many

[06:28] are almost entirely being gated

[06:30] by how much memory they

[06:33] at, quote, unquote, "reasonable prices."

[06:36] And it's not just hardware.

[06:37] Sony took a $565 million write-down

[06:40] on Bungie this quarter,

[06:42] essentially admitting that "Marathon"

[06:43] isn't going to save things.

[06:45] Sony's stock is down over 20%

[06:48] and, I mean, there's just

[06:51] Now, it's not a full-on disaster.

[06:53] I mean, the PS5 isn't

[06:55] But the bigger problem

[06:58] Now, when Sony's CFO talks

[07:02] to come up with the best

[07:04] he's not just being PR safe,

[07:06] and that's definitely

[07:07] Now, I believe Sony when

[07:10] when they'll actually release the PS6.

[07:12] I mean, at this point,

[07:15] is more or less locked.

[07:16] They've been working with AMD

[07:19] Their supplier contracts

[07:22] I mean, they can't just tear it all up

[07:24] and redesign the console

[07:27] or tripled in price,

[07:30] And things are kind of not heading

[07:32] in the right direction either.

[07:33] Most companies are expecting 2027

[07:35] to be worse for memory

[07:38] So whether Sony launches

[07:42] or they push it to 2028 or even 2029,

[07:44] they might be walking into

[07:47] than what we're seeing right now.

[07:48] I mean, there's just no good answer here.

[07:50] Delaying doesn't

[07:53] I think this is why they're talking

[07:54] about new business models out loud.

[07:57] So the rumors point to

[08:00] which would be Sony's

[08:03] So based on the leaks,

[08:04] this would be a third

[08:06] alongside the core PS6

[08:09] Basically the PlayStation

[08:12] Ship the portable PS6,

[08:13] but in a smaller form factor

[08:16] really as a true

[08:19] I think the reason why

[08:21] is that it matched the performance

[08:22] of the pro version of the

[08:25] while still costing a lot less

[08:27] and with all the benefits

[08:28] of the current generation

[08:32] Sure, it targets 1080p,

[08:33] but for a very long time,

[08:35] the Series S was the best deal in gaming.

[08:37] If the PS6 Lite can deliver

[08:41] at a significantly lower price point,

[08:44] great, problem solved,

[08:45] but I have some doubt about

[08:49] and how many compromises

[08:51] on the performance side of things.

[08:52] Sure, there are other levers

[08:54] I mean, they could try to

[08:56] to save some money.

[08:57] They could give you discounts

[08:58] based on subscribing to PlayStation Plus

[09:01] or maybe some kind of all access plan

[09:03] like Xbox used to offer.

[09:04] I mean, being creative

[09:06] is a good thing.

[09:07] But if anyone from Sony is watching,

[09:10] I have a different pitch.

[09:11] Come out and say it with me:

[09:16] for many, many years to come.

[09:18] Now, not as a, like, we still

[09:21] kind of thing.

[09:22] No, I mean make the PS5

[09:24] that sits below the PS6.

[09:26] Keep it up to date with

[09:28] the same games as much as possible.

[09:30] I mean, the same ways that

[09:32] from "Roblox" to "Pragmata,"

[09:34] the PS6 should exist as an upper tier

[09:36] to push things forward,

[09:37] but alongside the PS5,

[09:39] at least until they can

[09:41] at a reasonable price.

[09:42] Now, Sony has hinted at

[09:44] but they keep stopping

[09:47] But if you tell people right now

[09:49] that the PS5 that they buy today

[09:51] is going to be a supported current console

[09:54] for the next four, five years plus,

[09:56] even after the PS6 has launched,

[09:58] I think that goes a long way.

[10:00] I mean, sure, $650 is a

[10:03] but, like, wouldn't you feel better

[10:05] about knowing that that

[10:08] will actually still be relevant

[10:11] That's the specific phrase actually.

[10:13] PS5, relevant for a long (beep) time.

[10:16] And here's the thing,

[10:17] I think Sony should stick with the PS5,

[10:19] but I think Xbox have to.

[10:22] Sony is launching the PS6 from a position

[10:24] of, I would say, relative strength, right?

[10:26] I mean, even after a very rough quarter,

[10:28] they've still got the install base,

[10:29] they've got the games,

[10:31] The PS6 is going to sell fairly well,

[10:34] no matter if it launches at $600 or $800.

[10:38] But Xbox doesn't have that luxury.

[10:39] Hardware revenue there is

[10:43] the Series X and the Series

[10:46] and whenever the Xbox

[10:48] all of signs point to

[10:51] 800 to a thousand dollars there

[10:52] wouldn't surprise me one bit.

[10:54] Which is why if Xbox is smart,

[10:56] they should also commit to

[10:59] being fully supported

[11:02] To me, I think that the

[11:04] are powerful enough, right?

[11:06] Like, they're not holding gaming back

[11:07] like previous generations.

[11:09] There should be no rush to

[11:12] when the alternatives are

[11:16] Now, there's a lot more to talk about

[11:17] on the Xbox side of things,

[11:19] so make sure to subscribe to the channel.

[11:20] We'll be breaking that

[11:23] But if we step back for a second,

[11:25] Sony are being pushed by the RAM crisis

[11:27] toward potentially kind of compromising

[11:29] what that next generation

[11:31] Xbox are doing what they can to come back.

[11:34] Nintendo, I mean, they're

[11:36] with the Switch 2,

[11:37] but they're definitely