Sony has not yet decided on the list price of the PlayStation 5, but to produce a unit of its next generation console costs it around $ 450. To communicate this interesting detail is Takashi Mochizuki of Bloomberg, who had the opportunity to collect various information from sources inside Sony, which obviously want to remain anonymous.
The production cost of PlayStation 5 is only one of the factors that will determine the final price: the other, perhaps the most important, is the list price that Microsoft will choose for its Xbox Series X. In fact, it seems that Sony is waiting for the rival communicate its price positioning in order to contrast it with a particularly aggressive price list.
According to estimates reported by Bloomberg, in fact, the cost of $ 450 would require Sony to adopt a list price of about $ 470 in case it wanted to maintain the same margin it had on each PS4 at launch (production cost $ 381, selling price $ 399), however the Japanese company is likely to choose to move above or below $ 470 based on Microsoft’s moves.
According to Bloomberg, elements such as the price of DRAM memories – whose availability must always clash with the high demand for components from the world of smartphones -, SSDs and the new cooling system, have caused the increase in costs used for PlayStation 5, which is defined as unusually expensive (we are talking about a few dollars per unit, even if the standard price of this component is less than the dollar).
TWO CURRENTS OF THOUGHT: SALE IN LOSS OR IN ACTIVE
Internally at Sony there are two currents that push in opposite directions. The first – also supported by recent statements by CEO Kenichiro Yoshida – suggests selling the console at a loss. Indeed, Yoshida himself said that the success of this business cannot be assessed solely by the number of units sold, but by the number of active users, i.e. those who buy games and subscribe to service subscriptions. From this point of view, the sale of PS5 at a loss is desirable, as it would allow to create a large base of users capable of generating profits.
The second current, backed by CFO Hiroki Totoki, suggests instead to also earn from the sale of the console, thus adopting a list price that allows you to re-enter the costs and generate profits. At the beginning of the month Totoki reiterated that Sony must keep the production cost of PS5 under control and must precisely calculate the number of units that will be made during the initial life of the console. It also appears that the Coronavirus events will not impact on this aspect.
The reasons for this second trend are equally valid, also in light of the fact that the transition to the new generation will not be as clear as in the past. Although PlayStation 5 will offer some exclusives at launch, many games will continue to be available for PlayStation 4 and PS4 Pro as well. This means that there will be no immediate need to place as many units as possible to create a large installed base, as large part of the software can be distributed on both platforms