Michael Pachter Doesn’t Think Coronavirus Poses an Immediate Threat to PS5 and Xbox Series X Launch


Wedbush Securities analyst Michael Pachter has said that it’s too early for Sony and Microsoft to panic over the supply chain disruption caused by the recent outbreak of Coronavirus in China.

Last week, a note from Jefferies Group indicated that shutdowns that exceed a month are likely to delay the launch of the PlayStation 5 and Xbox Series X, with many technology companies already announcing shipment delays and supply shortages. However, Pachter told TechRadar that Sony and Microsoft will probably begin manufacturing their next-gen consoles in June, and the situation may be under control by then. Even if it isn’t, the PS5 and Xbox Series X don’t necessarily have to be produced in China, although that may have an impact on production costs.

“If Coronavirus lasts through June, it will be a problem,” said Pachter. “It’s possible that it lasts that long, but the stock market tells you that is not the case. If it were, the market would be tanking because of the long-term disruption of the supply chain.”

Pachter added that companies like Apple are feeling the impact of the outbreak because they don’t have immediate alternatives. On the other hand, Sony and Microsoft still have time to evaluate their options.

“I could see Apple panicking if Coronavirus is still an issue in a month, but I think Sony and Microsoft will quietly arrange for production in Taiwan and Vietnam (at a cost of maybe $5-10 per unit more at most) just to be safe,” Pachter concluded.

At the time of this writing, the death toll from Coronavirus sits at an estimated 722. This figure includes the death of Dr. Li Wenliang, who first detected the virus and sounded the alarm back in December.

[Source: TechRadar]

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