Sony has not choice but to release the PS6 in 2027 but it’s huge risk – Reader’s Feature

There may be no stopping this train (Credits: Getty Images)

With the PlayStation 6 launch widely expected in the next two years, a reader lays out why Sony has no real option but to start a new generation of consoles.

One of the greatest economic fallacies is the so-called law of supply and demand. Namely, if there’s the demand businesses will produce the commodity to satisfy it and if not, they won’t (or else go under). But things are rarely that simple and Sony are its proof.

If all the letters on this site are anything to go by, there’s little demand for a PlayStation 6. Yet arrogant and foolish Sony will by all accounts still go ahead and release one in the next year or two.

Not only is a new console unnecessary, when the potential of the PlayStation 5 is barely tapped, it’ll likely cost at least as much and probably a lot more. To make matters worse, even if they desire it, most people simply can’t afford to be splashing out on such luxuries.

But Sony are no fools. Consoles are years in the making and they cost a considerable amount of money before any return on the investment is made. The PlayStation 6 was probably greenlit at least seven years ago, with a considerable amount of money by now ploughed into it. Seven whole years or more.

It was around five weeks ago that I last published a feature with GameCentral: the one declaring uncontroversially that the video game industry is in crisis and more controversially that it was going to get worse, a lot worse. What I hadn’t considered is that a week or so later the US would be at war with Iran, starting a global economic crisis and raising the terrifying possibility that it’ll trigger World War 3.

Hardly the time to release a new video game console or, for that matter, Grand Theft Auto 6. Contributors to the comments section at the bottom of these features decry all the Debby Downers who paint such bleak pictures of the industry. Crisis, what crisis? The cynic with delusions of grandeur, they accuse GameCentral of writing them. For the record, I’m a video game scholar with expertise in political economy.

Seven years ago, in 2019, the video game industry was in a very different place. By 2020, during Covid-19 lockdown, it was in positively rude health. Who can blame Sony for thinking the market would expand and that there would indeed be the demand in 2026 or 2027 for a PlayStation 6. Or for thinking that Microsoft would capture the market with a new console by now, if they didn’t have an equally powerful console ready to compete with it. Could they really have predicted the rising cost of RAM chips, the disruption of supply chains, and a general contraction precipitated in part by an ongoing cost-of-living crisis set to get worse.

Designing a new console typically starts as soon as the current one is launched (Nintendo)

Sony committed themselves long ago. They could now, with the benefit of hindsight, abandon the project altogether, weather the losses and effectively pull out of the industry. Or maybe bury unwanted stock in the desert just as Atari once did with E.T. The Extra-Terrestrial. Short of economic collapse or WW3, it’s more likely that the console will be out in the next year or two regardless of demand, for at least then they’ll claw back some of those costs.

But what of Nintendo? What would you do in these circumstances? Would you be developing the Switch 3, or whatever it gets called, based on the current market or by speculating on the demand for such a console in seven years’ time? What about seven months’ time? The future is so uncertain that one can only wonder where we’ll be by then, let alone in seven years.

How much are RAM chips going to cost? How will supply chains be affected by the rapidly changing geopolitical environment? Will it be possible even to outsource production to countries like China or anywhere where labour costs are proportionately lower? It is not simply demand but whether costs of production can be kept low enough to sell consoles at a price people can afford. And the answer is increasingly no.

Like a bee that pollinates a flower, Nintendo do what any company does, reinvest profits. What Nintendo don’t do and can’t do is stand idle. Unspent capital is no more capital than the money you spend on purchasing a game or the computer you may be using to play it on. Capital (money or investment capital, productive capital or the means to produce things like consoles and commodity capital or the things such as the consoles that are sold to consumers) is that only when put in motion to make more money.

Regardless of future demand, Nintendo and probably Sony will continue ploughing money into research and development in the hope of better times to come. They’re staked in the game even if there’s no longer any gamers by then to play it. They can make televisions, build theme parks, and turn their IP into film franchises, but in a crisis that threatens to be the crisis to end all crises – short of investing in the military industrial complex – when it comes to taking a punt on the future, in these times they may as well roll dice.

By reader Ciara

RAM shortages will affect everyone (Microsoft/AMD)

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