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Retail Shelves Suffering PS2 Shortage

7 Sep, 2004 By: John Gaudiosi

Retail shelves have been depleted of PlayStation 2 hardware in recent weeks.

On the heels of short supply, Microsoft has recently replenished its Xbox supply and will have plenty of hardware on hand over the next few months, according to the company.

Although a large shipment of Sony's PS2 hardware arrived Aug. 15 and production is rolling, hardware is expected to be in short supply through October, according to analysts and retailers.

There's a reason for those empty shelves.

Come October, Sony is expected to ship its PStwo console, a device that, like its PSone, will be roughly 30 percent smaller than the current hardware. The device was originally expected to ship in August, according to retailers, but production problems have delayed the launch until October. Sony had originally planned on replacing those empty shelves with the new hardware and shipped no new PS2s to retail in June despite the price cut.

“Sony has not commented publicly about the device, but has already applied for the copyright of PStwo,” said P.J. McNealy, video game analyst, American Technology Research. McNealy added that the new device will include built-in online capabilities and will likely retain the $149 price point.

Analysts expect that if the current PS2 shortages continue, it could boost Microsoft's second-place stake in the console wars. Sony currently has an insurmountable lead in first place, with Microsoft and Nintendo trailing.

Price point is still an issue with retailers and game publishers, and $149 for Xbox and PS2 isn't seen as enough incentive to increase sales, despite an unprecedented fall software lineup.

“If Sony and Microsoft bow to market and publisher pressures and cut prices to $99 in Q4, 2004 will be a very exciting season in the struggle for market share,” said Billy Pidgeon, video game analyst, The Zelos Group.

According to data from The NPD Group for the month of July, hardware and software sales have remained healthy thanks to the hardware price cuts. Hardware sales are up 9 percent, and software sales are up 48 percent for the month of July (year-over-year). PS2 (300,000 units sold) outsold its competitors during the month of July, with Xbox selling 200,000 units and GameCube selling 100,000 units. Sony had 50 percent market share, with Microsoft keeping 33 percent and Nintendo 17 percent. But those hardware numbers are all down from June, when Sony sold 428,000 PS2s, Microsoft sold 262,000 Xboxes and Nintendo sold 109,000 GameCubes. PS2 software unit sales (4.8 million) outperformed Xbox software (2.6 million) and GameCube software (1.6 million).

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