Report: Sony can’t construct a PS5 for lower than $450

Aurich Lawson

Video game enthusiasts around the world are looking forward to the launch of PlayStation 5 this fall. However, according to a new report, due to the challenges of getting affordable parts, the console may be priced more than players would like to pay.

According to Bloomberg, Sony has so far been unable to cut the cost of manufacturing a PlayStation 5 below $ 450, which can cause difficulties for the company.

The consoles are expected to hit the shelves in the next ten months, but apparently some parts have not yet been completed. "We need to keep the PlayStation 5 bill of materials under our control and set the right number of units in first production," said Hiroki Totoki, Sony’s chief financial officer, in a recent call to win.

Sources tell Bloomberg that the problem is basically good old-fashioned supply and demand. Sony is not only competing for parts with console competitor Microsoft. other device manufacturers are also in the mix. DRAM and NAND flash memory prices are reportedly high due to the high demand from companies like Samsung that are launching new generations of high-end flagship cell phones.

Sony is reported to spend more than usual on the console cooling system to avoid overheating. The promised hardware, including an eight-core AMD Ryzen CPU based on the 7nm Zen 2 microarchitecture and an AMD Radeon-based GPU with ray tracing support can probably use it.

This is in line with what we know about the Xbox Series X, which has been reported to be built using an almost identical AMD architecture. At the end of last year, Microsoft announced how big the console would be, which may indicate the complicated cooling design. We don't yet know what the final PS5 hardware looks like, but the V-shaped development kit has sparked almost as much discussion of its own cooling requirements as jokes about using the console as a pizza holder.

The difference between a dollar here and a dollar there actually adds up. Theoretically, Sony could decide that it is worth selling the consoles at a loss and making the money elsewhere. However, consumers are more likely to pay more to buy a console than to buy a console. Manufacturing the current generation of PlayStation 4 is said to cost $ 381 per unit. When it was launched in 2013, units sold for around $ 20 more – a small margin, but still a margin. If Sony used a similar tactic this time, the expected starting price for a PS5 would be $ 470.

We asked Sony Interactive Entertainment about the report, but we haven't received an answer yet.

Price to play chicken

Sony is of course not the only player in the console game market. Whatever the PS5 cost may be, will no doubt be determined by the price point Microsoft sets for the next iteration of the Xbox line. The X series is said to be in stores like the PS4 for vacation 2020, which means someone has to blink first.

Industry observers expect Microsoft to release additional details, including pricing, for the Series X console (or consoles) at this year's Electronic Entertainment Expo in June. However, Sony recently confirmed that it will not be attending or presenting E3. Without a known press conference on the calendar for months in advance, Sony has more flexibility to determine when and how a price point and other details will be announced.

Second place definitely has its advantages. Holding fire certainly worked well for Sony at the beginning of the previous (current) generation of consoles. The announcement at E3 2013 that the PlayStation 4 would be retailable for $ 399 came just hours after Microsoft announced a $ 499 price for Xbox One. The unveiling was a moment of microphone drop for ages and set the tone for the fall launch. (Sony has taken a similar step in previous generations when it blew the Sega Saturn out of the water.)

Of course, the introductory price is not everything. A generation of consoles in the 21st century seems to take about seven years, and various price cuts and updated SKUs are standard mid-style developments today. Shortly before the launch of PS4 and Xbox One, Ars took a look at historical price data and found that price cuts were common two to three years after the launch. The PS4 and Xbox One were no exception: the PS4 dropped to $ 349 in 2015, and the original Xbox One dropped to $ 249 in 2016 before the smaller, cheaper Xbox One S hit the market in summer.

Based on what we know about the X series so far, the specifications appear to be so similar to Sony's that both consoles may only come on the market at the same price. However, Microsoft could have another key to implementing Sony's plans. Microsoft is also reportedly working on a lower-cost, digital-only gaming box to be sold with the X series in the fall.

There are conflicting reports of what kind of digital experience Microsoft has in mind. Some reports say the middle-class console, codenamed Lockhart, has been scrapped in favor of working on a streaming-only device that works more like a gaming roku (or Google's still challenged stadia) and a similar price tag below $ 100. Dollar has supply. However, other reports indicate that Lockhart is still a non-performance, lower-performance disc console, and developers are expected to fully support it alongside the X Series – much like Microsoft did with the Xbox One S you could get into the sweet spot where Microsoft has something to sell at half or less of the PS5 price.