tokilamockingbrd said:
incorrect. Shipped means a retailer has purchased it. It does not mean Sony has produced this many PS4s. Sony has likely produced many more PS4s than this "shipped" number.
Shipped= retailer has purshased
Sold= Consumer has purchased
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This is so wrong on so many levels I don't even know where to start...
Let's start with the 4 mIllion PS4s Sony has entered into the fq report. This does NOT mean that those 4 million PS4s have been sold, shipped, eaten, sent to New Zealand (inside joke, don't think about that one if you don't know) or whatever.
This is the number of PS4s Sony has actually had manufactured within that quarter, and this is the number Sony must state primarily. Now these 4M units could be anywhere - from at the manufacturer to at in people's homes.
Now any console manufacturer doesn't like to be abused as a warehouse or storage facility. So once the consoles come off the package area in the plant, they almost immediately start their voyage to wherever Sony wants them to go. The manufacturer makes as many consoles per day/week as the company has been ordered to make - and those orders were settled months to one year ahead of the actual manufacturing dates.
Here's the point: The best warehouse for Sony (or whoever is selling whatever) are the ships that carry the consoles from China to wherever. This takes roughly eight weeks. So for eight weeks, the warehouse problem is solved - and Sony actually still has time to sell the stuff on the ships.
If you walk into a shop and buy a shiny new box (not one with a pile of dust on it) right now, it was likely manufactured around late July. At that time, the shop may or may not have ordered the exact number of boxes they have now. So on every ship carrying consoles, some of them are already sold - some of them will be sold while the ship is on its way - some of them may be surplus (still not sold when the ship arrives).
So to sum up:
fqn, the number in the fq report = number of consoles manufactured.
Shipped = number of consoles that have left the manufacturing plant. For reasons given above, almost always the fqn number
Sold = number of consoles sold to distributors
Inventory = number of consoles not yet sold (usually given as a revenue value, not as a number)
fqn = Sold + inventory
As you can see, the real meaning of "Shipped" is simply the number of consoles that left the manufacturing plant. Shipped is often used as meaning "consoles that have been sold", which is an understandable, but incorrect use of the term.
In times of heavy demand, all consoles on a ship are long sold before the ship arrives at its destination, so "Shipped" becomes "Sold" and there is no inventory left to worry about.
It is the "Art of mass manufacturing" to actually have as small an inventory as possible, while not being totally outsold too early. It is also an art to "overship", knowing/guessing correctly that your inventory (= unsold consoles on the ships) will be rapidly depleted due to an incoming action of yours before you have to hire warehouse space at the ships' destinations (and your action actually leads to the planned result - which is another problem).
I'm qute sure this is exactly what happened this fq with Sony and the price reduction. It would have been massively stupid to plan the price drop and not have sufficient inventory (again, remember: inventory = unsold consoles on ships!) to sell for the expected increased distributor demand spike. So sometimes in July, a much larger number of consoles started being manufactured and shipped - for an arrival date in probably late August/early Spetember when distributors were informed of the price drop. During July and August, those "surplus units" on the ships were not yet sold. Since those units _were_ manufactured and had to be counted in the 4M figure, they had to reappear somewhere, and that is (somewhat hidden) in the table of the inventory values.
So to make a very long story short: In all likelihood, there were never 2.8M units on shelves. There were a lot of (then still) unsold units on ships by the time the report was written.