PS5: Did Analysts Hit The Mark With Their Predictions

By
Essiah Malick
-
17




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.”

Source: Gurufocus.com


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.

 

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  • J.j. Barrington

    Any analyst thinking the PS5 drops next year should be fired.

    • DarthDiggler

      @jjbarrington:disqus

      You haven’t made any case for that. Given the Scorpio is coming this holiday it would be a good strategy to rain on that parade by announcing a much more powerful PlayStation about the time Scorpio releases.

      Now take a moment to make a logical case for your point of view?

      • J.j. Barrington

        Of course I can, but I thought it’d be obvious.

        First: these consoles are only just hitting their primes. Developers are only now starting to get the hang of them, which means there’s a whole lot more that can be pulled out of them. Even the base consoles.

        Second: the PS4 is on a tear. The rate it’s selling at rivals the best-selling console of all time, the PS2. New consoles don’t typically come out when the current ones are doing so well, and there’s zero indication that that will change in the next year(Sony’s predicting 18 million for either this calendar year or fiscal year; in either case, that’s quite a lot of units to cut off).

        Third: why start spending money and ramping up on production of a new console when, as in point 2, your current product shows no signs of slowing down? I get Sony’s got quite a few able devs, but why split them between two consoles when you don’t even split them between a console and a handheld? I mean, if you don’t have to?

        Fourth: while it’d be nice to rain on the Scorpio’s parade, why bother? Xbox 1, as a whole, is essentially an also-ran at this point. In what scenario do you see Scorpio needing to be addressed by Sony, especially since Scorpio is currently looked at as Microsoft’s answer to the Pro? If anybody knows that power isn’t what wins a generation, it’s Sony: they’ve done so twice while having one of the weakest products on offer.

        Fifth: it would amount to little more than PR strategy. Because of the aforementioned reasons, there’s little likelihood the Scorpio will cause a significant shift in momentum; it’s almost impossible that a “premium” console aimed at a rather narrow niche will sell so quickly that it overtakes the PS4, even in mindhsare if not marketshare. So many things are currently in Sony’s favor that the move would only be seen as one-upping the Scorpio solely for the sake of doing that. Like kicking into another gear when the race is already soundly won, who would view it as even necessary?

        Sixth: might it not be better to wait even a year later, for access to both better and cheaper tech? The Scorpio is still an XB1; if the PS5 releases so soon, that allows Microsoft to come back not long after with their own more powerful console. Unless they shift to a three-year schedule for releasing hardware, it just becomes a battle of attrition where nobody really wins: consumers won’t keep up(please don’t use the phone example, as those are subsidized through contracts); because you’re essentially in a constant cycle of development, those costs never truly get a chance to be recouped by manufacturers; developers never get enough time with hardware to get a good handle on it, meaning what they want to make is never as good as it could have been.

        Honestly, there isn’t much to gain from releasing the PS5 at this point, while they could lose the incredible momentum they have with the PS4 right now.

        As I said before, being that these are logical cases, I’d have thought they would be pretty obvious. With that in mind, I went straight to the conclusion. The article itself notes the unlikely scenario that would have to occur for Sony to push the PS5 out next year. Heck, most of what I said is in the article, and I didn’t bother to read it until you replied to me. Of particular note is what Pachter mentioned, too: the popularity of 4K TVs will also play a factor, and neither of the other two analysts seem to be taking that into consideration, either.

    • Eddie Battikha

      Keep staying behind in Times and wanting Technology and Hardware held back for everyone just for you, Denny’s is hiring if u need a 2nd job ?

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  • heavenshitman1

    Any analyst with the name Michael Pachter shoupd be fired

    • DarthDiggler

      @heavenshitman1:disqus

      Pachter is well paid by various industry people for his knowledge. How much do you make off of yours? Likely jacksh!t.

      I am not saying Pachter is always correct, but his career would have been short lived if his analysis had absolutely no value. On the other hand if random internet folks like yourself offered valuable analysis people like Michael Pachter wouldn’t have a marketplace to offer his analysis for a premium.

      Pachter makes a very good point about 4K broadcast, I am not sure if I agree with him that will be the main driver for an updated PS. Given the PS4 and XB1 are both x86 is really doesn’t hurt them to update their consoles if they keep x86 (AMD/Radeon) processing going. Technically speaking they should be able to release software that runs on PS4 and PS5 with concessions made for the dated hardware.

      • heavenshitman1

        Someone upvoted me on my Pachter line lol. Yeah, Pachter is a lucky guy in his job. Maybe these days he does better ( I saw a youtube vid maybe couple years ago detailing his line of predictions, and statistically he was blatantly wrong more than 50% of the time), or maybe he does a lot of other analysis behind the scene’s that I don’t see shown in the media.
        But some of the things he says these days just seem so so obvious and even slightly vague and open ended.
        I think he predicted Switch would have a hard time to succeed unless it kept a low price of 250 or under.
        First of all, yeah neat prediction, basically if a great new electronic device sells at a ‘steal’ price. It’ll be successful. If it sells at rediculous price, it’ll suffer. That seemed to be the gist. Not exactly revelational thinking.
        And 2ndly, as history has gone, Switch has become a smash hit so far.
        Talking about 4k TVs, another obvious one. Im sure you could google 4K stats and get a clear view of current 4K penetration and trend patterns.
        But then I’m a gamer and tech enthusiast, maybe all these investors simply aren’t that savvy with it all, dunno

      • heavenshitman1

        Thought I’d update my response…
        Read this line

        ‘Mario Kart 8 Deluxe was also the best selling game on the software side with over 460K physical units sold (over 550K counting digital copies). This is even more impressive once you consider that the game launched on April 28th and it lines up with the predictions of Jefferies’ Senior Equity Analyst Atul Goyal, who called it a “megahit”.’

        Now there was a ballsy prediction that turned out right on the dot. That some analytical work for you. Pretty sure Pachter never saw that coming.

  • DarthDiggler

    @Essiah Malick

    Here is the big issue I have with this article: “PS5: Did Analysts Hit The Mark With Their Predictions”

    We won’t have this answer until Sony announces the hardware and the launch date. The headline is a tad disingenuous because we simply do not have the means to answer that question.

    Kudos for writing an actual article that pulled from multiple sources with relevant quotes though. I just think the headline doesn’t match the body of the article.

    • Hey Darth,
      Really appreciate your feedback and I do agree with your point. 🙂
      We’re always up for suggestions from our readers.
      What do you suggest would have been a better title?

  • TwoLiterSoda

    OK no way will a ps5 release next year let’s just put that to bed right now. It would be so stupid to do so and Sony is not stupid. There is no need for a ps5 this early, none. And the article fails to mention all the”leaks” Thong had gotten wrong, and there has been a looooooooot. This article is just click bait as per usual lately, if no real news then hey let’s just round up lame predictions and act like it’s newsworthy. Ugh gaming journalism lately is in shambles.

    • Eddie Battikha

      Without a doubt PS5 is launching Fall 2018, PS4 launched weak in Fall 2013. Tekken 7 next month is only launching 900p, PS4 Pro is a stop gap system meant for PSVR. http://wccftech.com/itagaki-ps4-pro-just-rhetoric-vr/ The last of us 2 and Death Stranding will be the last 2 Exclusives in 2018 for PS4. Ill stick with my PS4 Pro running on my LGB6 until Fall 2018 for PS5.