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Rumors have begun to swirl about the number of next-generation PlayStation consoles
Sony
plans to manufacture. The latest suggests that, because of the pandemic, the number will double.
The new PS5 is expected to use microprocessors made by
Advanced Micro Devices
(ticker: AMD) and some combination of storage and memory supplied by the likes of
Western Digital
(WDC) and
Micron Technology
(MU). Selling double the number of videogame consoles might be significant for Sony (SNE)—not from selling the hardware itself but because of revenue from accessories and software—but Its hardware suppliers aren’t likely to see much more revenue.
The increase, though, will require the suppliers to ramp up deliveries of various semiconductors such as processing units, graphics chips, memory and storage.
Sony’s U.S.-traded American depositary receipts gained 3.1% to $76.84 on Wednesday. Western Digital stock climbed 4.8% to $44.07, Micron rose 1.6% to $50.51, and AMD rose 1.1% to $55.34. The
S&P 500 index
gained 0.9% and the tech-focused
Nasdaq Composite Index
rose 0.5%.
After Micron’s earnings last month, Chief Business Officer Sumit Sadana said in an interview that videogame consoles were a small part of Micron’s overall business and that devices such as smartphones and datacenter applications account for far more significant portions of its revenue. The company, based in Boise, Idaho, makes several types of memory used for computing and flash storage.
Micron didn’t respond to a request for comment Wednesday on the impact of the rumored decision to double production. AMD, Sony, and Western Digital also didn’t respond to requests for comment.
One reason consoles are small potatoes for Micron is that big videogame system makers infrequently introduce new systems. Apple and its rivals, by contrast, release new smart phones every six months—faster in some cases. Because new videogame systems don’t come often, their guts tend to be constructed to make them last a long time.
In recent weeks, Sony has disclosed various aspects of the new system, such as its exterior design and several games, but it hasn’t discussed price. Rival Microsoft plans to release another Xbox console this year, too.
Bloomberg reported Wednesday, citing unnamed people, that Sony would roughly double its PlayStation 5 production to 10 million units this year, up from an earlier report that it was aiming to produce 5 million to 6 million PS5 units by the end of March 2021.
Write to Max A. Cherney at max.cherney@barrons.com