A recent report says that the PS5 and Xbox Series X release dates may be pushed back due to the coronavirus outbreak. But we don't think it's very likely. Financial services firm Jefferies Group (via Business Insider) released a note this week claiming that because Sony and Microsoft make their consoles and accessories in China (which has been hit hardest by the virus), future versions of PS5 and Xbox series X may be delayed. "The video game industry is making, or beginning to turn, a multi-year product generation for the 2020 holiday season," the note reads. "If the (business) closures exceed about a month, game schedules will be delayed. New consoles may also suffer supply issues due to extended outage, ahead of their scheduled Fall 2020 releases."
Do not panic
(Image credit: Microsoft) We didn't think that seemed likely, especially given the panic currently surrounding the coronavirus. So we decided to ask Michael Pachter, a gaming industry analyst and managing director at Equity Research, to review the report. While Pachter notes that it's unclear how long the coronavirus epidemic will last, he also points out that while the mobile industry may be affected by the epidemic, console manufacturers are another pot of fish. While Apple likes Chinese manufacturing, Microsoft and Sony aren't limited to the country. "(Apple) doesn't really have a realistic manufacturing alternative because of the complexity of the assembly (lots of components, very high specs, relatively high cost)," Pachter told TechRadar. "On the other hand, the Xbox and PlayStation shouldn't be produced in China, but it's obviously the cheapest country." Pachter goes on to explain that Microsoft and Sony should be under less pressure because the two companies have lower production demands, due to their late-2020 release dates, and (worst case scenario) have manufacturing alternatives in countries like Taiwan and Vietnam. On the other hand, it is rumored that Apple would launch the iPhone 12 much earlier, in September, so any interruption could cause delays due to the tens of millions of units that should try to move, and remember, they are practically confined to China for this production. . Pachter estimates that Microsoft and Sony won't start production on their next-gen consoles until at least June. However, when they do, they will only consider producing about a million units per month, up from three to four million units per month, according to Apple. "If the Coronavirus lasts until June, it will be a problem for (Microsoft and Sony)," says Pachter. “It might last that long, but the stock market tells you that it doesn't. If that were the case, the market would crash due to long-term disruption to the supply chain.” "I could see Apple panic if coronavirus is still a problem in a month, but I think Sony and Microsoft will quietly arrange production in Taiwan and Vietnam (at a cost of maybe €5-10 more), just to be safe." ."
beat the fees
(Image credit: N/A) At worst, Pachter still thinks Microsoft and Sony will have plans in place. And it's because of Trump's Chinese tariff. President Trump had proposed a 25% tax on items from China to the United States, which would have pushed up the prices of the Xbox Series X and PS5, but the phase one deal signed by the United States and China last month means it won't happen. - At least for now. But as Pachter points out, both Microsoft and Sony likely have a backup plan for production in case pricing goes ahead. "I don't know what they intend to do, but I think they are seriously considering moving half of their production to Taiwan or Vietnam to meet US demand," Pachter tells us. While nothing is set in stone, and we can't definitively say it won't happen, at least for now, it seems unlikely that we'll see the PlayStation 5 and Series X delayed.