Sony Is Struggling With PlayStation 5 Price Due to Costly Parts – Bloomberg by Takashi Mochizuki
On February 13, Bloomberg ran the article linked above. It discussed Sony’s possible internal PS5 pricing strategy, which is set to launch this Holiday. The thirst for next gen console news is intense and this certainly satisfied some fans’ thirst. I wanted to look at a few choice quotes from the article and share my thoughts: Consider it my contribution to the well.
With the PS5, the company is taking a wait-and-see approach…
This is interesting to hear from the company that is on the top and has been for nearly seven years. I have to imagine that manufacturing, PR, advertising, and more has to be locked in a decent ways out from the launch and reveal itself. To hear that Sony is waiting to see what their competitor does strikes me as oddly, and perhaps wisely, reactive.
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…
This is not a manufacturing twist I would have though of. Phones are becoming insane; easily settling into a $1,000+ price point. RAM is essential for these devices to do everything they do, especially when folding displays get involved. It never occurred to me that game consoles, phones, and PCs all got their RAM from the same pool. It makes total sense. Speaking of that pool…
Sony has already canceled some previously planned features for a new mirrorless camera due this year owing to the constrained DRAM supply…
Sony may be robbing Peter to pay Paul here. Sony seems to know what keeps them in the black.
…Sony opted to lavish more on making sure heat dissipation from the powerful chips housed inside the console isn’t an issue.
All this says to me is that both the PS5 and the Series X are going to be a couple of powerhouses. No one wants a “red ring” situation on their hands.
Many of the games launched for the PlayStation 5 will also be available to play on the predecessor machine, so revenue from software and related network services is expected to keep the business performance intact.
This could mean a couple of things. My initial thought was that some late generation PS4 exclusives would also have some sort of PS5 version. Ghost of Tsushima was my first idea since it has a Summer 2020 release window. That idea doesn’t entirely hold water though since the PS5 is backward compatible, at least with the PS4. Could Sony sell PS5 versions of their PS4 games? Sure! I don’t think that would garner the good will of the people though. Maybe it’ll work though; Nintendo has done that at least twice with the Zelda franchise.
The back half of that previous quote reminds me of the PS4 launch time. Bloomberg reports that the PS5 is currently costing Sony $450~ to manufacture, which means Sony would have to sell it above that price to make a profit. The question on people’s minds is whether or not Sony would sell the PS5 at a loss. They did with the PS4. If the PS5 really costs $450 to make, Sony may sell it for $400 and bank on PS+ and games sales to make up the difference. It certainly is an option and lends itself to the wait-and-see strategy.
For now, all is quiet on the official front for the next gen consoles. Microsoft is expected to make their big splash at E3 2020. Is early June too late for Sony to make any drastic changes to their pricing plans? I guess we will all have to wait and see.