There has been a lot of talk about a PS5 , after we uncovered back in March that Macquarie’s Research Analyst Damien Thong had predicted that a PS5 may be coming out in the second half of 2018. Here is what he had to say:
“While we have tempered expectations to account for rivalry with Microsoft/Xbox and PC gaming, we note that the success of PS VR (which has reached 915K units sold) highlights the health of the ecosystem. We expect Sony to launch a >10 TFLOPS ‘PS5’ in 2H18 to secure the installed base.”
Now what gave this rumor credibility was the fact that Damien Thong is the same guy who also correctly predicted the arrival of the PS4 Pro and PS4 Slim. He basically predicted that PS4 Neo would be arriving at the end of 2016. So we can safely say that we are talking about a person who has a proven track record to say the very least, and hence his prediction does hold some weight.
However a much lesser known fact is that Damien Thong is not the only one who has predicted a potential PS5 . Back in January Mario.J.Gabelli of Gurufocus.com at the Barron’s round table conference had this to say about Sony Corp
“We expect the new PlayStation launch and operational improvements in consumer electronics and entertainment to generate EBITDA growth through 2018. We also think the spinoff of the entertainment assets could be a catalyst.”
Now the interesting thing to note here is the fact that Gabelli does not name the PS5 , he just says a new PlayStation launch. perhaps I might be reading a bit too much into it but it does give you some food for thought.
Yet despite all of these financial analysts predicting that we may potentially see a PS5 in 2018 I am a bit skeptical about it to say the very least. In theory the PS5 can arrive in 2018 , however Sony has absolutely no need for Sony to release a PS5 in 2018.
The most common argument is that with the release of Xbox One Scorpio, and with it being the most powerful console in existence Sony will be compelled to release a new console to compete with Microsoft.
However the most obvious flaw with this logic is the fact that the Xbox One has nearly next to no exclusives, and you need exclusives to sell a console. hence no matter how powerful the console is it wont sell like “hot cakes” if you only have old or remastered titles to play on it.
Sony is at a very dominant position in the market and the PS4 Pro was released not so long ago , and hence I don’t believe that Sony will be releasing a PS5 so soon after selling their most ardent fans on the idea that the PS4 Pro would be the best way to play games into the near future. If they do release a PS5 in 2018
Add to that the fact that they can potentially trounce the Project Scorpio release by announcing titles such as God Of War , Bloodborne 2 and Spider-Man amongst others. These have a potential to not only overshadow the release of Scorpio but to also cement Sony’s already dominant position in the console market.
The only possible incentive Sony has to release a PS5 is if the Scorpio is a phenomenal success. Don’t get me wrong if Microsoft gets the price point right the Xbox Scorpio is going to be quite popular , however it wont be a mind blowing success for the above mentioned reasons. If by some stretch of imagination Scorpio does end being an unbelievable success then and only then will Sony contemplate coming out with a PS5 in 2018.
Hence I tend to agree with the statement that Michael Pachter recently made
“You know, I think Sony’s probably going to wait and see what happens with the Scorpio, and if the Scorpio puts pressure on them and if it’s really that much better, maybe they’ll accelerate. But you know, back to my 4K TV thing, I don’t see 4K broadcast until 2020, and I think 4K broadcast is what’s going to cause people to switch their TVs over. So, I think that’s a good time to launch a new console.”
It makes sense for Sony to play the waiting game , at this point Nintendo Switch is also doing quite well thanks largely to Zelda BOTW , and Mario Kart 8 Deluxe. However the Switch still remains underpowered when compared with its closest competitors and it still remains to be seen if the sales of the console holds up past its year of release.
In short, it might make sense from a financial perspective to release a PS5 in 2018 , however the same cannot be said from a consumers perspective, and hence I believe Sony will curtail the release of the PS5 and complete the console cycle of a minimum of six years and invest in its mid- generation console upgrades before even thinking about taking such a step.