I don't think it's just the shortage, it's the combination with their extremely high boosted demand. Normally you would expect that their sales would be way down by now. In its 3rd year the PS4 sold 23.6 million. In its 6th year it was down to 14 million. And in the 7th year it sold 4.5 million units. Now obviously part of that last drop was because of the announcement of the PS5 depressing sales, but even without it I doubt they would have passed 8 million. By releasing the next console, even in the middle of the chip shortage, Sony's console sales for the year ended up being about 21 million total instead of about 8 million total had they delayed it. The Switch probably still sells 20 million this year. With the chip shortage, it's hard to see Nintendo substantially passing that number right now.
Let me ask this in a different way then, do console manufacturers start the next generation as soon as they see a decline in sales, or is it that they plan it pretty early on in the console life cycle and only stave off the decline as best as they could until it is optimal for them to release a successor platform?
Do they have enough foresight to see well into the future to know when to release it? Or do they start before it even gets to that point to be ready for its release?
Did Nintendo actually expect the switch to sell over 100M this easily? Or was it just an occurrence that graced their luck that they left to the heavens?
The Sony PlayStation 2 was selling quite well, and Sony decided to release the PS3, who was even delayed due to hardware issues that caused a need to delay it. But Sony planned for the PS3 architecture several years in advance, right after the PS2 released.
The Nintendo Wii U started development in 2008-ish, only to release in 2012, a year
after the death of the Wii.
Microsoft started working on the Series X console in around 2015-16 and the XBox One was already near dead by 2020 judging by the sales. It peaked early anyway.
DS was selling gangbusters in 2010 and Nintendo went to throw in the 3DS the following year.
PS4 development started after the PS3 launched and in 2007-8, the PS3 was a flop at launch. Only thing Sony did was accelerate the desire to adopt the platform and reduce the awfulness of the PS3. They shifted focus on blockbuster titles that released giving it life after life and the PS3 remained until 2017.
Quite frankly, this argument that “it’s selling well” does not compute when a product selling well and being received well is a gamble, a gamble that takes into account that A) they have known quantities and B) their known quantities can produce a desirable product.
A product selling well is a result of playing the cards right and the audience perceiving it well enough to support it. Wii U is an example of playing multiple cards incorrectly. Switch is an example of playing cards correctly.
Every company wants a product to sell well because they want to profit off of the consumer base that throws money at them. No company wants a product to sell poorly, it’s selling better than expected is nice to have but it is not the limiting factor of why or when they release a product.
Rather than the arguments simply being, “They will release it when it is ready“, it is “they will release it when it’s not selling so well“. Companies aim to stop it from not selling well, they don’t actively make it sell bad. And yes, you may be questioning while reading this, “when did I say they did?”, let me just say it’s not you and not anyone. No one actually says they aim to sell a bad product. That’s not really my point.
My point has to do with timing.
Let’s take into account what you mentioned previously which is the Silicon shortages, correct? If they delay the product just because it is selling well they will not get another window that is in their favor. The shortages are so bad that going this far into development and then simply canning it doesn’t mean they’re going to release it in 2023 or 2024, that means that the next likely window would be well after 2026 or 2027. Why are you may ask? Because the silicon shortages pertains to high demand in short supply, except that they are at a high supply amount already, but there’s more demand than that supply.
All industries at the moment are booked to full capacity for several years and this does not only affect the chip that operates the system, but other factors that are pertaining to said system. Board, storage, memory, etc.
If Sony had the PS5 ready in 2019, they would have released it in 2019, but that was not the case.