Sony Trims PlayStation Download Speed to Conserve Bandwidth

Responding to the gravity of the situation triggered by the coronavirus pandemic, Sony Corporation SNE has decided to reduce the download speed of its iconic PlayStation games in the United States in order to conserve bandwidth. The strategic move seems to be the need of the hour as the world is virtually under a lockdown, with governments across the globe increasingly advocating social distancing to prevent the spread of this contagious disease in a community. In addition, most corporate firms are encouraging employees to work from the safety of their homes to avoid being infected through possible exposure.

The outbreak has forced a shift in several aspects of daily life to the online domain — elementary schools, colleges, workplaces, shopping, dining, entertainment and even funeral — as people are forced to seek refuge in the safety of their homes to perform their daily chores. This, in turn, has increased household broadband demand manifold, forcing the Federal Communications Commission (FCC) to grant additional airwaves to major wireless carriers on a temporary basis. The telecom firms have also worked in unison to handle the upsurge in broadband traffic and joined FCC’s "Keep Americans Connected Pledge", offering a vital lifeline to countless people whose lives have been crippled by this crisis.

Amid such a scenario, Sony has opted to cut down on PlayStation download speed across the country to address Internet stability. This follows a similar move in Europe. Although the company has promised that the quality of the ‘robust gameplay’ will not be compromised, it is likely to test the nerves of gaming buffs with slower or delayed game downloading process.

Notably Sony is aiming to gradually replace PlayStation 4 version (PS4) with PS5 in the upcoming holiday season. Since its retail debut on Nov 15, 2013, PS4 has been a key revenue driver with sales recently topping 106 million units, making it the second best-selling home console in the history of video games. In addition, more than 1.15 billion games were reportedly sold for PS4, generating additional revenues for the company.

However, with PS5 launch in the horizon, sales have been waning as players seem more eager to wait for the new product. Sony had earlier disclosed the product features of the upcoming model with various market teasers, revealing its several hardware enhancements. These include a faster hard drive that will significantly reduce or eliminate load times, a 4K Blu-ray drive and a more adaptive controller. The company is also reportedly splurging on the cooling system to ensure that heat dissipation from powerful chips inside the console does not cause any issue for gamers.

The slower download problems of this cult gaming versions could be a cause of worry for Sony as it faces high manufacturing costs for PS5, with scarce components and erratic supply of raw materials.

Nevertheless, Sony has joined the likes of streaming service providers like Netflix, Inc. NFLX and The Walt Disney Company DIS along with technology behemoths like Alphabet Inc. GOOGL in their quest to free up bandwidth for increased mass consumption and upsurge in Internet traffic.

We remain impressed with the initiative by this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
    
The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Sony Corporation (SNE) : Free Stock Analysis Report
 
The Walt Disney Company (DIS) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research