Sony Is Struggling With PlayStation 5 Price Due to Costly Parts

polonyc2

Fully [H]
Joined
Oct 25, 2004
Messages
18,580
Scarce components have pushed the manufacturing costs for Sony Corp.’s next PlayStation to around $450 per unit, forcing a difficult price-setting decision in its battle with Microsoft Corp., according to people with knowledge of the matter

The PS4, released in 2013 at a retail price of $399, was estimated by IHS Markit to cost $381 to manufacture...with the $450 unit cost and a similar gross margin, the PlayStation 5’s retail price would have to be at least $470...that would be a hard sell to consumers, considering Sony’s most expensive machine now is the $399.99 PS4 Pro and is often discounted...

https://www.yahoo.com/finance/news/sony-struggling-playstation-5-price-035030181.html
 

vegeta535

Supreme [H]ardness
Joined
Jul 19, 2013
Messages
4,594
$400 seems the sweet spot for people. I am sure Sony is trying to hit $400. I am sure Sony and MS are both playing chicken with releasing pricing so they can undercut the other like Sony did with the PS4. Both would like to charge $500 but know it will be a hard sell.
 
Last edited:

Marees

Gawd
Joined
Sep 28, 2018
Messages
724
Sony has already canceled some previously planned features for a new mirrorless camera due this year owing to the constrained DRAM supply, several people with knowledge of the matter said

The company’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, according to people familiar with Sony’s operations. Samsung Electronics Co. just announced its Galaxy S20 product range, each variant of which will have 5G and a minimum of 12GB of RAM in the U.S



https://bgr.com/2020/02/14/ps5-price-struggles-bloomberg-report-blame-galaxy-s20/
 
Last edited:

Zepher

[H]ipster Replacement
Joined
Sep 29, 2001
Messages
17,671
Wasn't the ps3 priced at $500? I don't think it's out of the question that this one will be too.
It was $599 I believe for the 60GB model.
It was also the cheapest BluRay player when it came out so that is one reason it sold so well.

The best way to get the lowest price on the PS3 at the time was to sign up for the Sony Visa card and use that to buy the PS3 as they gave you either a $200 or $250 statement credit after spending $500 within 90 days.
I told my friend about that deal and that is how he got his.

just checked, it was a $150 credit when you bought the PS3 with the Sony Playstation Visa card which made the PS3 $250. (PS3 was $399 at the time of this promotion)
 
Last edited:

vegeta535

Supreme [H]ardness
Joined
Jul 19, 2013
Messages
4,594
Wasn't the ps3 priced at $500? I don't think it's out of the question that this one will be too.
$500/600 depending on the HDD size. I am perfectly fine with a $500 for the kind of specs you get. Just the general population seems spooked when they are anything over $400. Xbox 1 got destroyed when they showed a $500 price point.
 

vegeta535

Supreme [H]ardness
Joined
Jul 19, 2013
Messages
4,594
Sony has already canceled some previously planned features for a new mirrorless camera due this year owing to the constrained DRAM supply, several people with knowledge of the matter said

The company’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, according to people familiar with Sony’s operations. Samsung Electronics Co. just announced its Galaxy S20 product range, each variant of which will have 5G and a minimum of 12GB of RAM in the U.S



https://bgr.com/2020/02/14/ps5-price-struggles-bloomberg-report-blame-galaxy-s20/
Don't you love how phone manufacturer are just eating up components for their pointless yearly refreshes that bring nothing. Landfills are just filled with perfectly fine components cause people need the latest and greatest every year.
 

Derangel

Fully [H]
Joined
Jan 31, 2008
Messages
19,271
They could MSRP it at $600-800 at launch and it would still fly off the shelves, considering that all the eBay gougers regularly sold the PS4 for $700+ when initial stock was scarce.
That's....Not how it works. Gougers were able to sell for that much because the system was scarce and people wanted it, the gougers were preying on FOMO or the fear of missing out.. It doesn't mean that it would have sold as well if it launched closer to that price.
 

Grimlaking

2[H]4U
Joined
May 9, 2006
Messages
3,250
If sony can introduce their new generation of consoles with a differentiation between a 4k console and a HD/1440p console and have pricing for each set up correctly I think they would do quite well.

While 4k tv's are cheap they still are not the majority of the market.
 

vegeta535

Supreme [H]ardness
Joined
Jul 19, 2013
Messages
4,594
They could MSRP it at $600-800 at launch and it would still fly off the shelves, considering that all the eBay gougers regularly sold the PS4 for $700+ when initial stock was scarce.
No they couldn't. The blow back would be huge. What scalpers sell for has nothing to do with MSRP. $500 is the absolute Max and people will still bitch.
 

Verge

Supreme [H]ardness
Joined
May 27, 2001
Messages
6,620
$400 seems the sweet spot for people. I am sure Sony is trying to hit $400. I am sure Sony and MS are both playing chicken with releasing pricing so they can undercut the other like Sony did with the PS4. Both would like to charge $500 but know it will be a hard sell.
400 was a sweet spot 7 years ago.

Iphone was 650 then, now they are over 1000. People will pay 449 or even 499 for a PS5. I will preorder on launch night as usual.
 

sfsuphysics

I don't get it
Joined
Jan 14, 2007
Messages
14,182
Sell it for 399, take a loss on sales then make it up with overpriced accessories like a second controller, or licensing on all the games.

But seriously a camera in the ps5? For bloody fuckall why? Did they not learn from the MS spy with you feature? Really banking on the selfie game?
 

vegeta535

Supreme [H]ardness
Joined
Jul 19, 2013
Messages
4,594
400 was a sweet spot 7 years ago.

Iphone was 650 then, now they are over 1000. People will pay 449 or even 499 for a PS5. I will preorder on launch night as usual.
It not a iPhone. People believe they are a necessity. Console are not a necessity to majority of people.
 

Astral Abyss

2[H]4U
Joined
Jun 15, 2004
Messages
2,768
I don't want another PS4/XBO generation that's a stripped down, noisy, middle-of-the-road console that we have to suffer with for 6 years. I seriously hope Sony and MS don't skimp on things just to hit a $399 price point.
 

Krazy925

Supreme [H]ardness
Joined
Sep 29, 2012
Messages
4,646
If they’re $500 I’ll buy both on launch day.

If they’re $600 I’ll probably skip both until they drop in price.

If I skip the Xbox’s release I probably won’t buy one because of PC cross support and I don’t care for halo ogears.

I was an old school Xbox fan back in the day. I’ve had all their systems and only got PlayStation devices as gifts from friends as they upgraded to the refreshes.

Xbox better bring their A game this year or else it’s gonna be bad for them.
Having access to a lot of the catalog through the PC makes this an easy decision for me.
 

Marees

Gawd
Joined
Sep 28, 2018
Messages
724
If they’re $600 I’ll probably skip both until they drop in price.
I have a feeling that both Sony & MS will cut down the ssd size to meet the targetted $400-$500 price point

(& maybe bundle 1tb/2tb additional disks/cartridges along with console for $500-$600 )
 

Krazy925

Supreme [H]ardness
Joined
Sep 29, 2012
Messages
4,646
I have a feeling that both Sony & MS will cut down the ssd size to meet the targetted $400-$500 price point

(& maybe bundle 1tb/2tb additional disks/cartridges along with console for $500-$600 )
Depending on if they actually make the SSD user replaceable that might not be a deal breaker for me.

500GB wasn’t enough on my X1 launch. Also once the disc drive is removed I won’t be buying the consoles anymore. I’ll just grab the games on steam and stream them to my TV.

I’m definitely in the extreme minority at this point but I haven’t bought a single digital game for this console except maybe NBA 2k19 because I was tired of having all these NBA games on my shelf. I like to own my games and play them years later.

PC games that ship has sailed for.
 

Ragenrok

Supreme [H]ardness
Joined
May 15, 2007
Messages
4,219
Don't you love how phone manufacturer are just eating up components for their pointless yearly refreshes that bring nothing. Landfills are just filled with perfectly fine components cause people need the latest and greatest every year.
Haha yup, I'm still rocking my pixel XL that was a huge upgrade from an iPhone 5s lol. At this point I can't be bothered to upgrade more than every 4-5 years, don't see the need for it because like you said yearly refreshes rarely bring real upgrades
 

chameleoneel

2[H]4U
Joined
Aug 15, 2005
Messages
3,348
I don't think this will be a long term problem. Sony will be ordering 70+ million of these, over the next 7-ish years. While phone tech this year may be overlapping and i-phones sell a lot more than consoles; in a couple of years, its likely the phone tech won't be directly overlapping anymore.
 

Derangel

Fully [H]
Joined
Jan 31, 2008
Messages
19,271
Depending on if they actually make the SSD user replaceable that might not be a deal breaker for me.

500GB wasn’t enough on my X1 launch. Also once the disc drive is removed I won’t be buying the consoles anymore. I’ll just grab the games on steam and stream them to my TV.

I’m definitely in the extreme minority at this point but I haven’t bought a single digital game for this console except maybe NBA 2k19 because I was tired of having all these NBA games on my shelf. I like to own my games and play them years later.

PC games that ship has sailed for.
I wouldn't be surprised if the drivers are just a controller and memory soldered straight to the motherboard on both systems this time around.
 

Astral Abyss

2[H]4U
Joined
Jun 15, 2004
Messages
2,768
I wouldn't be surprised if the drivers are just a controller and memory soldered straight to the motherboard on both systems this time around.
Me either. Saves on cost to them. It seems likely that's why there's been the talk of the expansion slot. Otherwise it would be a huge detractor, at least for the PS5, to loose the replaceable storage option. I'm ok with the expansion slot as long as I can put my own drive in it. If I have to buy a Sony/MS drive for a huge markup? ....no thanks.
 

Sycraft

Supreme [H]ardness
Joined
Nov 9, 2006
Messages
4,709
It was $599 I believe for the 60GB model.
It was also the cheapest BluRay player when it came out so that is one reason it sold so well.
Even then it didn't sell particularly well. Goes double given the utter dominance of the PS2, which always helps (people often stick with the same brand they have). It's price wasn't the only reason for it, but it sure was a factor. There is just only so much many people will pay for a game console. Those same people may well be willing to spend a grand on a new iPhone every year but still won't drop $600 on a console. The way people value things is not always logical.
 

Verge

Supreme [H]ardness
Joined
May 27, 2001
Messages
6,620
It not a iPhone. People believe they are a necessity. Console are not a necessity to majority of people.
That's what everyone said when apple launched a 1,000 dollar iphone(along with cheaper models.) Guess which sold the most? Going from 400 to 500 dollars, might get them a 10% drop in 2020. Poor people aren't buying a 5 anyway till late 2021. Launch day/month/holiday season are generally invested gamers with discretionary income.
 

Verge

Supreme [H]ardness
Joined
May 27, 2001
Messages
6,620
Even then it didn't sell particularly well. Goes double given the utter dominance of the PS2, which always helps (people often stick with the same brand they have). It's price wasn't the only reason for it, but it sure was a factor. There is just only so much many people will pay for a game console. Those same people may well be willing to spend a grand on a new iPhone every year but still won't drop $600 on a console. The way people value things is not always logical.
$750 in today's money. At $500 both consoles are fine.
 

polonyc2

Fully [H]
Joined
Oct 25, 2004
Messages
18,580
one of the reasons the base PS4 did so well was because of the price...$100 less then the new Xbox...PS5 at $500+ would be crazy...will cause more people to choose the PS4 Pro...isn't everything on the PS5 going to backwards compatible anyhow?...so the only thing people will miss out on is ray-tracing and the UHD drive- and only hard core techies care about that
 

viivo

[H]ard|Gawd
Joined
Sep 7, 2005
Messages
1,698
Casual gamers are already being conditioned to love stream gaming. Real-time rendering is unecessary and ever so inelegant. In 20 years I wouldn't be surprised to see simple streaming boxes (Sony and MS branded of course) take the place of consoles.

Then Nintendo will seize the opportunity to introduce some weird offline cartridge system.
 

Flogger23m

[H]F Junkie
Joined
Jun 19, 2009
Messages
10,935
Wasn't the ps3 priced at $500? I don't think it's out of the question that this one will be too.
Yes but it didn't work out so well up front. Took them a while to regain similar sales to the 360. Inflation is a thing so $500 now isn't $500 back then, but I still think $500 might be a bit much. They may have to bite the bullet and break even at $450 until the price comes down but it depends on marketing, exclusives and competition. Coming off the PS4 they are in a good spot and the PS3 had other issues that hopefully they don't repeat.
 

Derangel

Fully [H]
Joined
Jan 31, 2008
Messages
19,271
$750 in today's money. At $500 both consoles are fine.
No one looks at prices and goes “oh that price is much less now than it would have been a few years ago”. I think both consoles will be fine at $500 as well, as long as they’re marketed correctly.
 

zamardii12

2[H]4U
Joined
Jun 6, 2014
Messages
2,813
Wasn't the ps3 priced at $500? I don't think it's out of the question that this one will be too.
It was. The 20GB all black SKU which is what I bought at launch was $499. The 60GB PS3 with built-in memory card readers and silver trim was $599. But you have to remember why it was that much... Sony spent billions developing a custom CPU for the PS3, Sony put the hardware of the PS2 into the original PS3 which made the PS3 capable of playing the entire Playstation library of games, and Blu-Ray players were new at the time with players costing on average over $1000 when the PS3 came along. There were a shit ton of reasons why the PS3 cost as much as it did, but it really shouldn't be the case of the PS5. It's all X86-based, AMD is creating the CPU and GPU, and there aren't billions of dollars that have been sunk into developing an entirely new and proprietary technology. The only thing that perhaps is pushing the PS5 over the $400 edge is the 4K blu-ray player which interestingly they chose not to put into the PS4 Pro while the Xbox One S and Xbox One X did, but that could be why they could offer the PS4 Pro for $399 as opposed to $499 like the Xbox One X.

So I am curious what in the PS5 is costing so much. I feel like neither company will release their pricing until the other does. Sony waited for Microsoft to release Xbox One pricing before announcing the $399 pricetag of the PS4, which also was going to be $499 as the Xbox One b/c the PS4 was set to be packaged with the PS4 camera in the box as well going into E3. They only removed it before their own press conference and price announcement after the Microsoft accountment. I am curious who is going to break first and release pricing, but it's very possible that if the parts continue to be pricey throughout the year then Sony could very well delay the launch of the PS5 by a couple months so they don't release right alongside the Xbox Series X. This in-turn may cause them to miss the holiday season, but it could potentially put them in a commanding place to potentially offer the PS5 at a lower price if they wait long enough for prices to drop a little more on parts.

I think Sony could get away with that scenario and not worry too much about losing the holiday 2020 sales especially b/c the PS4 is still selling great that if PS5 is delayed they could lower PS4 and PS4 Pro pricing for the holidays, and then drop the PS5 a couple months later at $399. I also think that since the PS4 outsold the Xbox One 2:1 that if people are wanting to step up from their PS4s that they'll wait for the PS5 to release anyway if Sony can achieve the $399 price-point. I think that scenario is entirely plausible. I highly doubt people who are already in the PS4 camp will jump ship to the other side if Sony decides to push the PS5 back a couple months just so they can get the latest console. Especially since all the next-gen systems will be compatible with the entirety of the previous generation's games, so I think we'll be seeing a metric shit ton of people selling their PS4 and Xbox Ones just to trade up. I mean what's the point of holding onto the old console when the new one plays all the same games? This has never happened before with some few exceptions like the PS1 to PS2 and PS2 to PS3 (but only 1st gen PS3s did this). Previous generations you had to hold onto your previous gen console in order to play the games... you couldn't play PS3 games in a PS4 and you still can't. You could play Xbox 360 games in Xbox One, but that functionality (done entirely through emulation) only came much much later and full compatibility is still not a thing.

It's going to be interesting seeing literally 10s of thousands of Xbox Ones and PS4s going up on Craigslist and eBay. It's been a very long time since one console generation's titles were FULLY compatible with the following generation.
 
Last edited:

polonyc2

Fully [H]
Joined
Oct 25, 2004
Messages
18,580
So I am curious what in the PS5 is costing so much. I feel like neither company will release their pricing until the other does. Sony waited for Microsoft to release Xbox One pricing before announcing the $399 pricetag of the PS4, which also was going to be $499 as the Xbox One b/c the PS4 was set to be packaged with the PS4 camera in the box as well going into E3. They only removed it before their own press conference and price announcement after the Microsoft accountment. I am curious who is going to break first and release pricing, but it's very possible that if the parts continue to be pricey throughout the year then Sony could very well delay the launch of the PS5 by a couple months so they don't release right alongside the Xbox Series X. This in-turn may cause them to miss the holiday season, but it could potentially put them in a commanding place to potentially offer the PS5 at a lower price if they wait long enough for prices to drop a little more on parts.
rumors are that Microsoft will be releasing pricing info first- at E3 in June
 

Grimlaking

2[H]4U
Joined
May 9, 2006
Messages
3,250
Casual gamers are already being conditioned to love stream gaming. Real-time rendering is unecessary and ever so inelegant. In 20 years I wouldn't be surprised to see simple streaming boxes (Sony and MS branded of course) take the place of consoles.

Then Nintendo will seize the opportunity to introduce some weird offline cartridge system.

LOL imagine buying a game that when you plug it in, it has the built in ram and storage for the game in the cartidge. You plug it in and your system boots into that game.

Oh wait we had that before right? I mean isn't that what the early consoles all did? I wonder if we could do that again.
 

UnknownSouljer

Supreme [H]ardness
Joined
Sep 24, 2001
Messages
6,670
Wasn't the ps3 priced at $500? I don't think it's out of the question that this one will be too.
The PS3 was still underpriced at $500/$600. It should have costed over $700. Sony lost money on every console and it nearly bankrupted them. It was the console that got Kaz Hizarai fired. It was a massive Pyrrhic victory. Sony's gaming division literally almost sunk the entire company. They learned a lot of lessons from that. A) people aren't willing to pay just any price. And B) selling consoles that lose money is a losing strategy.

That's what everyone said when apple launched a 1,000 dollar iphone(along with cheaper models.) Guess which sold the most? Going from 400 to 500 dollars, might get them a 10% drop in 2020. Poor people aren't buying a 5 anyway till late 2021. Launch day/month/holiday season are generally invested gamers with discretionary income.
The one that sold the most is the iPhone XR and then the 11. Most people are not buying $1000 phones despite your fantasy. Most people aren't buying $600 consoles. Most people aren't even buying $300 consoles. You still haven't addressed how one item is viewed as a necessity of life with nearly 100% market penetration (as in, virtually everyone owns a cellphone of some variety) whereas a Playstation is a gaming device that only a fraction of gamers own, not even 100% of that particular market.

It's entirely different markets. Even if phones costed $5000 and people bought them, it wouldn't prove that the market would bear $600 game consoles. I might as well say: Mercedes Benz sells cars for $100k, so people can afford a $1000 console. Those two markets DO NOT RELATE AT ALL.
 

Grimlaking

2[H]4U
Joined
May 9, 2006
Messages
3,250
The one that sold the most is the iPhone XR and then the 11. Most people are not buying $1000 phones despite your fantasy. Most people aren't buying $600 consoles. Most people aren't even buying $300 consoles. You still haven't addressed how one item is viewed as a necessity of life with nearly 100% market penetration (as in, virtually everyone owns a cellphone of some variety) whereas a Playstation is a gaming device that only a fraction of gamers own, not even 100% of that particular market.

It's entirely different markets. Even if phones costed $5000 and people bought them, it wouldn't prove that the market would bear $600 game consoles. I might as well say: Mercedes Benz sells cars for $100k, so people can afford a $1000 console. Those two markets DO NOT RELATE AT ALL.
Can you name 5 people that have a smartphone that do not game on them in some fashion? No... then there is crossover. Sure it's a rather ephemeral crossover but it is there.

Please note the number of people is meant to highlight that the majority of smartphone owners also play games on them and of those a large portion are making gaming related purchases on them as well.
 
Top