By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Sony Discussion - Report: PS5 manufacturing cost pushed to $450 due to competition and scarcity of parts

How much do they plan on selling the console for if its only $450 to make? Wouldn't $500 or $550 be enough? Or do they plan on trying to make a shit ton of profit buy selling it at $600 to $800?



Around the Network
Azzanation said:
How much do they plan on selling the console for if its only $450 to make? Wouldn't $500 or $550 be enough? Or do they plan on trying to make a shit ton of profit buy selling it at $600 to $800?

If it cost that much to make they would sell it for $400 to $500

$500 is the ceiling if you don't have a cheaper option like Xbox will.  PS4 cost just under $400 to make at launch and quickly turned profitable as part prices came down.  They sell at a loss or slight profit on the console because then they make money on every game and every purchase you make on PS store and from PS+



I am Iron Man

Robert_Downey_Jr. said:
Azzanation said:
How much do they plan on selling the console for if its only $450 to make? Wouldn't $500 or $550 be enough? Or do they plan on trying to make a shit ton of profit buy selling it at $600 to $800?

If it cost that much to make they would sell it for $400 to $500

$500 is the ceiling if you don't have a cheaper option like Xbox will.  PS4 cost just under $400 to make at launch and quickly turned profitable as part prices came down.  They sell at a loss or slight profit on the console because then they make money on every game and every purchase you make on PS store and from PS+

There's no word on that from MS.

shikamaru317 said:
Azzanation said:
How much do they plan on selling the console for if its only $450 to make? Wouldn't $500 or $550 be enough? Or do they plan on trying to make a shit ton of profit buy selling it at $600 to $800?

Most likely they will either sell at a small loss at $400, with the intention to make back what they lose with subscriptions and game & accessory sales, or sell it at $500, possibly with a bundled game. All signs point to Xbox Series X being more powerful than PS5 and more expensive to build, so they will want to have a lower price than Microsoft most likely, so that they don't have a weaker console at the same price, so they may sell at a small loss at $400. The question is, how will MS respond, will they be ok with Xbox Series X costing more than PS5, as long as Lockhart/Series S is cheaper than PS5, or will they aim for price parity with PS5 as well as having a cheaper option with Lockhart/Series S? I could easily see Lockhart Series S at $300-350, PS5 at $400, and Series X at $500, but I don't think that Series X will sell for $100 more than PS5 unless Lockhart is real and is cheaper than PS5. 

Seriously, that wouldn't be a small loss, it would be huge.



Wouldn't be surprised if MS is facing the same issues with Xbox.



shikamaru317 said:
Nu-13 said:

There's no word on that from MS.

Seriously, that wouldn't be a small loss, it would be huge.

Not really. PS3 was sold at something like a $150-200 loss early gen as I recall. A $50 loss per console is chump change compared to that, especially since accessories like extra controllers, official headsets, etc. are all sold with quite a bit of mark-up (I believe game controllers cost less than $20 to make, but are sold for $50). It's also worth noting that more console game sales are digital than ever before, and the profit margin on digital games is higher than on physical games. And course they have PS+ subs and PS Now subs making them money as well. They can easily offset a $50 loss on hardware early gen between all of those sources of revenue.

A smaller loss than a colossal one doesn't make it small and it wouldn't be $50 (which would still be a lot).



Around the Network

The main problem here that I can see is, every time sony tiried to sell hardware thats either too expensive or sells at a loss, failed. thats the case with the ps3(they recoverd, sure, but thats after they did drastic measures to bring the price down like cutting entier BC chips) or the vita (vita and 3ds were overpriced for the market, but the 3ds had a tonn of headroom to cut prices while the vita literally couldn't do so)...
if MS comes out with both a cheaper and a more expensive option, sony becomes trapped between a powerful console quality handheld with enough specs to satisfy japanese devs, a cheap home console, and a ore powerful one, with no obvious way out.



TheBraveGallade said:
The main problem here that I can see is, every time sony tiried to sell hardware thats either too expensive or sells at a loss, failed. thats the case with the ps3(they recoverd, sure, but thats after they did drastic measures to bring the price down like cutting entier BC chips) or the vita (vita and 3ds were overpriced for the market, but the 3ds had a tonn of headroom to cut prices while the vita literally couldn't do so)...
if MS comes out with both a cheaper and a more expensive option, sony becomes trapped between a powerful console quality handheld with enough specs to satisfy japanese devs, a cheap home console, and a ore powerful one, with no obvious way out.

I do wonder how much price will come into play this gen. How many people are willing to leave their trophies and friends behind on the Sony ecosystem over $50-$100 bucks? Especially when MS did so poorly with exclusives this gen. Sure they got a bunch of new studios and the plan is to turn it around but how many consumers are going to take that gamble over Sony who's already proven they can do it.

MS was hurt by the higher price but I think it was everything that MS did that gen that affected them. I know I left the xbox ecosystem because of the lack of support 360 was receiving towards the end of the gen. Sony was still getting games and I made note of that. Add in everything xbox did during the reveal, weaker console, higher price it was to much for MS to recover from. I know for a fact I wont be going to back to xbox ecosytem over $50-$100 especially if it involves me getting weaker hardware on top of it. I want good games and until MS can prove they can deliver that I have no interest in going back to that ecosystem.



shikamaru317 said:

Most likely. Industry analyst Zhuge is estimating the current build cost of Xbox Series X at somewhere in the $460-520 range, based on the current cost of parts, with the rumored specs for Series X.

Am I the only one who remembers who Zhuge actually is? Years ago. he started posting in another froum, telling he is a Pakistani PhD student in medicine. I don't know how/when that ended and how he tur4ned into an industry analyst. Quite a strange career change, but I'm pretty sure Zhuge has no clues whatsoever about mass manufacturing of electronic devices and components (or mass manufacturing of anything). He is just parroting numbers he finds on the internet. He is well in line with all those "insiders", working on the principle that if enough people shoot at a barn door, someonw will eventually hit the wood.



Looking like a $500 launch for both consoles.

Also, didn't Sony build a more powerful PS4 with a cheaper BOM, compared to MS and the XOne? Zhuge speculates the next Xbox to have a BOM of $460 - 520.



TheBraveGallade said:
The main problem here that I can see is, every time sony tiried to sell hardware thats either too expensive or sells at a loss, failed. thats the case with the ps3(they recoverd, sure, but thats after they did drastic measures to bring the price down like cutting entier BC chips) or the vita (vita and 3ds were overpriced for the market, but the 3ds had a tonn of headroom to cut prices while the vita literally couldn't do so)...
if MS comes out with both a cheaper and a more expensive option, sony becomes trapped between a powerful console quality handheld with enough specs to satisfy japanese devs, a cheap home console, and a ore powerful one, with no obvious way out.

Has Xbox ever outsold the PS when they were both the same price? It always seem like the XOne is cheaper, with all its deals, discounts, cuts (aside from the start of the gen), but it never seems to beat out the PS4 in NPD's, yearly sales totals, etc.