Just recently, Nintendo has sold 84.59 million units of their most recent gaming console: the Nintendo Switch, which was released on March 3, 2017. This is a big deal for their company because the amount of Switch consoles sold are already so close to the amount Nintendo Wii consoles that were sold, which was 101.63 million units over the lifespan of 13 years.
With the Nintendo Switch being one of the most successful gaming consoles of all time to release, on the other hand we have PlayStation and Xbox that had some sort of trouble releasing their new gaming consoles. In November during 2020, both of Sony’s PS5 and Microsoft’s Xbox Series X consoles released 2 days apart but were apparently not in the hands of the majority of consumers that planned on buying them.
While the numbers do prove that the PS5 sold 7.8 million units in its first 5 months while the Nintendo Switch sold only 4.8 million units in 10 months, it doesn’t change the fact that a lot of consumers are complaining that they still couldn’t get their hands on a PS5 yet.
When the PS5 and Xbox Series X released, the only way to purchase those consoles was to order them online due to the COVID-19 pandemic restricting retailers and consumers themselves from purchasing in-store. As online orders were the only option to buy the newest consoles, every consumer had to go on a retailer’s website and jam the webpages just to get a single console on their buying cart.
The next biggest issue was now having to deal with market scalpers using bots to enter first in the queue of ordering a PS5 or Xbox Series X. Since they had the upper hand, the majority of scalpers began posting pictures online of owning hundreds and thousands of the new consoles, claiming that the only way to get a new console now was to buy it from them at double the price.
Andrew Mouanoutoua is a consumer who waited outside a Target store in the morning for nearly 5 hours in line just to get a PS5.
Going back to the Nintendo Switch, even though the console has been selling out really fast lately, there seems to be people who at least own the console rather than a market scalper who owns dozens of them just to resell all of it.
Hebrews Xiong, a gamer and worker at Walmart, admits to how easy it was to own a Nintendo Switch while not being able to get a new PS5 or Xbox Series X.
Most people who were trying to buy a PS5 or Xbox Series X claim that the only reason why they couldn’t get one was due to online-only orders and scalpers, but are those really the only reason?
According to a Walmart tech worker, who chose to stay anonymous, he explained in detail about the real reason why PS5s and Xbox Series Xs aren’t being purchased enough by actual consumers: the high demand of chips required for these consoles that aren’t being produced enough.
Using a PS5 for example, it apparently costs more to produce a console than actually selling it. While the base cost of a standard PS5 being $500 is still a lot of money, it’s still not enough to cover the cost of actually producing the system. A unit cost for one PS5 is around $450, but that doesn’t include the costs of manufacturing, packaging, and shipping of the console.
Exactly like what the Walmart tech worker said, the biggest factor comes down to the fact that the PS5 and Xbox Series X requires the same type of chip hardware to produce a fully-functioning console. The company behind the chip, Taiwan Semiconductor Manufacturing Co. (TSMC), is currently in a very tough spot of producing enough of these chips due to COVID-19 and the high demands of electronics that also require these same chips just like the gaming consoles.
With that being said, it is quite clear to conclude that there are numerous reasons behind why people can’t own a PS5/Xbox Series X while the Nintendo Switch is easier to get a hold of. So, did Nintendo succeed in what PlayStation and Xbox failed at? At the moment, it sounds like they succeeded in satisfying enough consumers with enough consoles for purchase.
But if PlayStation and Xbox are able to overcome these problems in the long run, it is quite possible that their sales could surpass Nintendo at an even higher rate.
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