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PlayStation 5 Price Revealed, Priced Higher Than Sony Wants

Updated: Feb 19


The alleged price point for the upcoming PlayStation 5 may be a bit higher than Sony was planning.

According to Bloomberg, a lack of the components needed for PlayStation 5 has upped manufacturing costs, setting the new console's price at around $450 per build. Microsoft has yet to unveil the price for its own new console Xbox Series X, but the company has taken the first step by officially revealing it during the 2019 Game Awards.

For comparison purposes, the PlayStation 4 launched at $399 in 2013 with an estimated $381 manufacturing cost from IHS Markit. However, if the cost to build a PS5 is around $450, the retail price could be set close to $470, though Sony has yet to comment on the report.


REASON FOR HIGH RATES OF PLAYSTATION 5


The reason for the higher manufacturing costs is the scarce availability of components, as per Bloomberg’s sources. To be specific, Sony is reportedly facing supply issues with DRAM and NAND flash memory for equipping the PS5. The scarcity is due to increased demand for resources in the mobile segment from smartphone giants.

People working at Sony think the company should consider selling the consoles at a loss to match the pricing of Microsoft’s upcoming offering – the Xbox Series X. In the meantime, some executives think Sony should take a profitable approach with the PS5. Sony’s CEO Kenichiro Yoshida believes that the success of a console should be judged based on the number of active users and not by the number of units sold.

As I mentioned earlier, the pricing of PS5 is likely to be based on the price Microsoft sets for its Xbox Series X. Xbox Series X is expected to be announced at E3 2020. Sony usually decides the pricing of its consoles in February but this time, the company is taking a “wait-and-see approach,” according to people familiar with the matter.

The report also notes that the novel coronavirus outbreak has not affected the PlayStation 5 launch timeline so far. So, what would be your best guess for PS5’s pricing? Do tell us in the comments section.


CONCLUSION


Sony’s CFO Hiroki Totoki is striving to provide more transparency on PS5’s release, which reportedly has “caused consternation” (an unexpected feeling of anxiety) internally. “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,” said Totoki at Sony’s recent earnings call.

Ultimately, the retail price of the PlayStation 5 is tied to Microsoft's decision to price its Xbox Series X, according to those who work on the business side of the PlayStation brand. While nothing has been confirmed, more information regarding the Xbox Series X is expected at this year's E3 in June, which Sony will not be attending. Regardless, executives at Sony expect the console transition from PS4 to PS5 to be a smooth and gradual process since many of the launch titles coming to PS5 are planned to also be available on PS4.

Sony's PlayStation 5 is scheduled to go on sale in time for this year's holiday season.

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