PS5 price potentially revealed, and it's not pretty

Ruben Fields
February 14, 2020

For example, the PS4 went for a retail price of $399 but was estimated to cost around $381 to manufacture.

With the US$450 unit cost and a similar gross margin, the PlayStation 5's retail price would have to be at least US$470.

The PS5 reveal is set to happen before the end of the month, with Sony historically locking the pricing in by February, but it needs to remain competitive with Microsoft.

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.

So what does that mean if the PlayStation 5 ends up with a $450 unit cost? According to "people with knowledge of the matter" the console's manufacturing cost is now at around $450 per unit. Sony Chief Executive Officer Kenichiro Yoshida argues that one should judge business by active users over hardware sales. Gamers will be happy to hear Sony opted for a cooling solution ensuring better heat dissipation, but in so doing, the cost rose to a few dollars per console.

WPI inflation rises to 3.1 pc in January
Prices of airline tickets, health care, recreation, and education were significant contributors to inflation in January. Headline inflation refers to the overall number, while core inflation is the price rise , excluding food and fuel .

Numerous 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. It's worth noting that the ongoing Coronavirus outbreak has had no impact on PlayStation 5's production preparations.

Heritage says the console is in full working order and that it has the unique ability to play music while also playing games, a feature that did not come to games consoles into much later in life.

The PlayStation 5 is scheduled to launch later this year. The company may have to set the PS5's retail price at almost $500 to make even a little bit of profit on each unit.

There is reportedly pressure from Sony Corporation CFO Hiroki Totoki to provide more transparency and information in the lead-up to PlayStation 5's launch this holiday season, which has led to some internal distress. For instance, a boxed copy of the original Mega Man went for $75,000 last year, and a couple of years ago a copy of Super Mario Bros was sold for $100,000.

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