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PlayStation 5, Xbox Supply Crunch Leads To 10% Decline In Digital Games' Sales Over Black Friday Weekend

PlayStation 5, Xbox Supply Crunch Leads To 10% Decline In Digital Games' Sales Over Black Friday Weekend

Supply woes faced by Microsoft Corporation (NASDAQ: MSFT) and Sony Corporation (NYSE: SNE), which have led to a scarcity of their newly launched consoles tanked sales of digital games, by 10% in the period between Black Friday and Cyber Monday, according to game research provider SuperData.

What Happened: Console-game revenue declined 13% during the sales holiday weekend, as gamers waited to purchase the newly-released Xbox and PlayStation 5 units, according to SuperData, Bloomberg reported Wednesday.

Overall game spending remains on track to set a record this year and PC games have helped mitigate the fall in sales of console games, as per the games research firm.

“Despite the lower numbers on Black Friday through Cyber Monday, spending on digital games is growing significantly this holiday season,” said SuperData principal analyst Carter Rogers.

“Even individuals who might have bought physical games at brick-and-mortar retailers in a normal year are opting for the convenience and safety of downloading games,” Rogers explained.

Why It Matters: Game makers, who can offer new features on just-released consoles, record higher sales after the devices hit the market but supply-chain obstacles can be an impediment, noted Bloomberg.

The demand for the consoles on launch day was such that websites of Best Buy Co Inc (NYSE: BBY) and Walmart Inc (NYSE: WMT) could not keep up the pace with the shoppers.

Analysts have predicted shortages for both the consoles extending into 2021 due to demand fueled by stay-at-home gamers.

Roundhill Investments co-founder Will Hershey, who runs Roundhill BITKRAFT Esports & Digital Entertainment ETF (NYSE: NERD),  termed Sony a winner in the console wars for the moment.

Hershey said Sony could have the advantage due to exclusive titles such as “Spider-Man: Miles Morales” and “MLB The Show.”

Price Action: Microsoft shares closed nearly 0.4% lower at $215.37 on Wednesday. On the same day, Sony shares closed nearly 2.2% lower at $92.62 in New York.

Related Link: Sony PlayStation 5 Sold Out In Japan On First Day Of Launch

Photo courtesy of Sony


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