Sony (SNEJF) is pulling the plug, at least temporarily, on a major product in which it has struggled to get consumers interested enough to purchase. The tech company is pausing production of the $550 virtual reality headset for its PlayStation 5 console, the PSVR2, in an effort to clear up a backlog of unsold inventory, which is reportedly the result of the product’s lack of games, according to a new report from Bloomberg.
PSVR2 launched last year on Feb. 22, and Sony has so far produced over 2 million units with sales decreasing every quarter since its launch, according to Bloomberg. The report also reveals that during the fourth quarter of 2023, the company reportedly sold around 325,000 units of PSVR2 which is a stark decrease from the 595,000 units it sold during the first quarter that same year.
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Whie Sony struggles to move the PSVR2, the report from Bloomberg notes that Meta appears to be experiencing an increase in sales with its Quest virtual reality headset, despite its similar lack of gaming content.
So far, consumers can play major titles such as “Resident Evil 4,” “Five Nights at Freddy's Help Wanted 2,” and “Hello Neighbor: Search and Rescue” on Sony’s PSVR2. But the limited catalog of games is suggested to be a major factor in sales, and the cost to produce virtual reality games “is substantially higher than normal titles,” said Macquarie analyst Yijia Zhai while speaking to Bloomberg.
The report comes after Sony revealed in its latest earnings report on Feb. 14 that it was facing challenges selling its PlayStation 5 console, which was once in high demand a few years ago and retails for around $499.
The company revealed that it sold only 8.2 million units of the console during the last quarter of 2023, and that there will be a “gradual decline in unit sales from next fiscal year onwards” as the console has entered the “latter half” of its cycle. As a result, Sony decreased its expectations for PS5 sales to be from 25 million units to 21 million units this fiscal year.
“Regarding the PS5 hardware, which will enter its fifth year since launch, partially due to its entering the latter half of the console cycle, we aim to optimize sales with a greater emphasis on the balance with profits, so we anticipate a gradual decline in unit sales from next fiscal year onwards,” said Sony in its report.
The virtual reality industry is currently facing headwinds regarding maintaining consumer interest. According to a recent report from research firm Omdia, global virtual reality headset sales declined by 24% in 2023, compared to the year before.
“Meta's limited AR content and the $500 price tag on Quest 3 discouraged upgrades and failed to attract new adopters,” read the report. “PSVR2 lacked compelling releases, leading to slower adoption than its predecessor, worsened by Sony's shift in focus towards expanding PS5 peripherals.”
Omdia estimates that there will be a 13% decrease in VR headset sales in both 2024 and 2025.
