PS5 Price Could Be Higher Than Expected, Thanks To Manufacturing Costs

Ruben Fields
April 8, 2020

Whereas Sony Interactive Entertainment typically finalizes a console's price in February of the release year, followed by mass production in the spring, Bloomberg reports the company is taking a wait-and-see approach with PlayStation 5. While the margins were thin, they were still a profit nonetheless; this counts for a lot in an era where most consoles lose money and the hardware manufacturers need to make up the losses with game sales.

The original prototype of the PlayStation has sold for $360,000 through Heritage Auctions. This means that either Sony will have to take a risk and sell the PS5 at a higher price point, or stick to $400 and sell at a significant per-unit loss.

Scarce components have increased manufacturing costs for PlayStation 5 to around $450 per unit, according to a Bloomberg report citing "people with knowledge of the matter". 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, according to Macquarie Capital analyst Damian Thong. The next two consoles promise to be particularly powerful, so it will require an excellent cooling system to be sure to dissipate the heat emitted.

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.

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This is definitely way out of my price range, but for now I can at least admire the pictures, and you can too. It also looked like it was the last collaboration between Nintendo and PlayStation before their Super Nintendo CD-ROM plan didn't go through due to licensing deals. Microsoft is anticipated to be revealing its next console's price at E3 2020 in June.

The PSVR 2 could even launch sometimes after the PS5 releases.

Regardless of the component issue, Sony is scheduled to release some sort of guidance on its games division to board members sometime around the end of April, which will presumably include revenue based on pricing and sunk-costs calculations. The company held that meeting in late May previous year.

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