This.  This also explains why we haven't got a perm price cut yet.

Reading through some of the other comments, I don't think it is wise for them to lower that price.  Simply because they will enter a period of being perpetually sold out.  And they will never be able to get back to a health shelf stock until the PS5 arrives. 

I think 18M is very safe, with strech to 20M and 19M being the most probable (which is still 3M higher than their projection). I wouldn't doubt they out ship Switch or at least have a technical tie for the fiscal year (and that is considering Sony is like 2 or 3M ahead so far in the year, but I expect Switch to sell more on holidays).

Yep, they are probably at a point in their curve that additional production would cost more instead of less, and at current production they can sell almost all without pricecut so no need for it.

Now perhaps next year or 2020 they will see a point in reducing price.

Then they should do more PS4.

Exactly.

Oh ok.

1) yeah sony has a history of under-betting things. I feel like they do it on purpose (since it keeps happending) so they can come out and say "how is it doing this? it beat expectations".

2) I wouldnt be surprised if they actually manage to do like 18m+ this year.

3) Its very possible, that they didnt prepair enough stock, and actually run into shortages.


Look at last year, that 1week black friday deal, was sold out on the 2nd day.
Sony doesnt like to overship/stock things. Like in japan this year they had shortages of the normal PS4 & PS4pro right?
And the Pro was in shortage in europe and the US a few times too. So even if its the 5th year, there can be shortages, if Sony underestimated things to badly.

It depends on when they can get parts at the right prices..... sony might be waiting for options to present themselves (ei. so they maximise their profits).
Theres a downside to this ofcourse, if you dont predict sales expectations right, you run into shortages (which can then be costly to correct).

Sony/MS/Nintendo probably buy in bulk quantities whenever prices of units are at low points.
If someone else is currently buying parts ect or the prices arnt right they might just wait..... until their forced to buy
(and then they ll do it in small amounts, until prices allow them to buy large quanities again).

Stuff like that can lead to shortages, or to limiting choices, so they ei. dont do a price cut and just sell massive amounts.

Sony buys on long-term contracts with expected quantities that will either have fines, credits or extra pays depending on the changes they do on immediate purchase. But perhaps at current technology and efficiency their best cost on HW is around 1.5M produced a month and they only go above it (costing more on production) when they think the extra sales will bring much more revenue on SW in a way that they make more total profit.

This time it may not have be enough to justify doing price cuts to increase demand and at the same time occur more cost to increase supply because SW wouldn't pick up the slack.

We are in a time when the factories are "sold out" in China, it's XMas production crunch and there are no free supply lines available, anywhere, any factory. Even if they wanted, Sony could not magically produce more PS4s than they have ordered. In such a hypothetical scenario (throwing out other customers for production of additional PS4s instead), the manufacturing price would probably skyrocket to $400. That's just the ugly side of mass manufacturing.

At $199, the PS4 induces a loss in the books. Like last year, Sony will simply set a maximum amount of money they want to lose on hardware which limits the number of $199 PS4s available. (Needless to say, currently the plain PS4s sell for $329-$349 here in town so it seems NA gets preferrential treatment although NA isn't really the prime market for Sony). As Sony increased the forecast, but they will produce the additional 0.5M units after the XMas rush, towards the end of this fj. Maybe with flying in units straight from the factories, they can avoid empty shelves after XMas...