Console Wars Intensify as Supply Chain Issues Subside | Opinion

The current console generation has been marked by unusual circumstances, with the launch of the PlayStation 5 and Xbox Series X hindered by persistent supply shortages. Ordinarily, the simultaneous release of these systems would have sparked intense competition, but instead, the industry has experienced a period of faux-competition, with neither side able to fully engage due to the inability to meet consumer demand. The shortages have had a profound impact on the industry, effectively freezing it in place, with companies forced to revisit their plans and revise their strategies to accommodate the continued centrality of older consoles, such as the PS4. The pandemic has also led to the rise of lower-powered systems, which have filled the gap between high demand and low supply, with the Xbox Series S being a prime example. Furthermore, the industry has seen a shift in the way companies approach hardware updates, with Nintendo likely delaying plans for a Switch hardware update due to the continued strong sales of the existing model. However, with supply chain issues finally beginning to subside, the industry is poised for a significant shift. The past couple of months have seen a marked improvement in the supply channel for high-end consoles, with most major markets now having a relatively stable inventory. While some regions still experience rough patches, and certain retailers restrict sales, it is now possible for most consumers to purchase a PS5 or XSX within a day or two without resorting to scalper prices. This development is expected to bring relief to various stakeholders in the industry, although it also means that companies will have to contend with the aftermath of the supply chain disruptions, including the need to support older hardware for an extended period. The high-end consoles will offer improved resolutions, framerates, and loading times, but game development will still be limited by the need to ensure compatibility with older systems. As supply and demand balance out, companies can start to firm up their plans for dropping support for older consoles, with Sony's decision to make the Burning Shores expansion for Horizon: Forbidden West a PS5 exclusive being a notable example. However, the industry remains vulnerable to supply chain disruptions, and the issue of scalping continues to be a point of concern. The launch of high-demand hardware can still be affected by supply chain shocks, and the industry needs to be aware of the potential risks. Despite these challenges, the fact that supplies are finally starting to match demand has led to interesting sales numbers, such as the record PS5 sales in Japan. The competition between Sony and Microsoft is now poised to intensify, with both companies able to promote and support their consoles without the constraints of supply chain issues. The industry will finally start to see what's happening in terms of demand for these devices, and companies will be able to make more aggressive pitches to consumers. The first quarter of the year will still be affected by the process of unkinking the supply chain, but as the year progresses, the market is expected to become more demand-driven, with both companies focusing on exclusive software and service offerings to appeal to a broader audience.