Sony is allegedly taking a “wait-and-see” approach to pricing the PlayStation 5, along with having issues with finding certain parts.
Bloomberg reports that parts the scarcity of some components has pushed the manufacturing cost of the PlayStation 5 to $450 USD per unit. This comes from “people with knowledge of the matter.”
They further claim it is forcing a difficult choice regarding the console’s price, especially when compared to the upcoming Xbox One X. Both consoles are set to launch Holiday 2020.
Bloomberg claim that “Sony typically finalizes a console’s price in February of the release year, followed by mass production in the spring.” The anonymous sources claim that Sony was taking a “wait-and-see approach.”
They also claim Sony Executives are being patient, “as they anticipate the transition to be a gradual one” as many launch titles will be available on PlayStation 5 and PlayStation 4. The sources also claim that the Executives expect the revenue from games and network services to keep the expected business performance on track.
IHS Markit claims the manufacture cost of the PlayStation 4 cost $381, retailing for $399 on release in 2013. Based upon this, Bloomberg estimates the PlayStation 5 will retail for $470. For comparison, the PlayStation 4 Pro currently retails for $399.99.
Macquarie Capital analyst Damian Thong claimed to Bloomberg “Consumers will benchmark their expectations based on the PS4 Pro and PS4. If Sony prices above that, it would likely be to balance a need to offset higher materials cost, against risk to demand.” Sony declined to comment to Bloomberg.
Back in 2006, the PlayStation 3’s original model was revealed to sell for $599 USD- much to the mockery of consumers. This was compared to the Xbox 360’s initial cost of $299 just one year prior.
Comparatively, the launch of the original PlayStation devastated the Sega Saturn. While E3 1995 had Sega announce their Sega Saturn would retail for $399, Sony Computer Entertainment America’s Head of Development Steve Race approached the stage and simply said “$299,” and then left to thunderous applause.
Elaborating on the components, Bloomberg (via anonymous sources) claim Sony’s “biggest headache is ensuring a reliable supply of DRAM and NAND flash memory, with both in high demand as smartphone makers gear up for fifth-generation devices.” Anonymous sources claimed planned features had been cancelled due to this, such as a mirrorless camera.
During a recent earnings briefing in February, Sony’s Chief Financial Officer Hiroki Totoki reportedly stated “We must keep PlayStation 5’s bill of materials under our control and we need to make the correct number of units in the initial production.”
He also stated that the conronavirus outbreak in China had no impact on the new console’s production, though Sony had not yet decided how many units to produce in the first year.
For now it seems to be a game of chicken between Sony and Microsoft, with the growing coronavirus still being a factor for both- despite claims to the contrary.
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The PlayStation 5 launches Holiday 2020.
