Sony Group Corp. Halts PSVR2 Production Amid Slow Sales

Sony Group Corp. has decided to halt production of its PSVR2 headset temporarily as it struggles with a backlog of unsold units, sources familiar with the matter revealed, casting doubts on the attraction of virtual reality gadgets.

Since its launch, sales of the $550 wearable accessory for the PlayStation 5 have steadily declined, resulting in an accumulation of stocks, according to the insiders who requested anonymity as the information is not public. Sony has manufactured over 2 million units of the product since its release in February of the previous year, the sources disclosed.

IDC, a market research firm that tracks shipments to retailers, noted a continuous decline in PSVR2 shipments each quarter following its debut. The surplus of assembled devices is reportedly evident across Sony’s entire supply chain.

Despite the current challenges, IDC’s Francisco Jeronimo remains optimistic about the future of the VR market, projecting an average annual growth rate of 31.5% between 2023 and 2028, especially with the anticipated entry of Apple Inc.

While both Sony and Meta Platforms Inc. have been key players in the virtual reality arena, they have struggled to attract sufficient content and entertainment creators to make their platforms truly compelling.

Apple’s Vision Pro headset, despite its higher price point, has faced a similar challenge, lacking tailored apps from major entertainment platforms like Netflix and Alphabet Inc.’s YouTube at its launch.

In a recent development, Sony announced the closure of its PlayStation London division, which specialized in creating virtual reality games, signalling a shift in focus. This decision was part of broader layoffs that impacted in-house studios like Guerrilla Games, which had been working on an exclusive PSVR2 game in its popular Horizon series, Horizon Call of the Mountain.

“The high price of VR hardware acts as the main hurdle for its expansion,” noted Macquarie analyst Yijia Zhai. “Currently, there are limited games that support VR devices, and that will also lead to a lack of motivation for players to purchase VR hardware. This limited content also has a reason – the development cost for VR games is substantially higher than normal titles.”

Despite these challenges, Sony remains committed to expanding the range of content available on the PSVR2 headset. In February, the company announced that it was testing the ability for PSVR2 players to access PC titles, signalling ongoing efforts to enhance the platform’s appeal and address consumer concerns.