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Locked: Report: PS5 manufacturing cost pushed to $450 due to competition and scarcity of parts

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

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.



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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. 



Retail price is typically twice the production cost. Sony has to take a big L in the beginning here.

Compare to the iPhone XS with comparable component costs.

As part of its teardown, TechInsights estimated the cost for each component. Its total is $443, as compared to the $1,249 price tag for the product. So just 35 percent of the purchase price goes to pay for the actual hardware.

https://www.cultofmac.com/579177/iphone-xs-max-production-cost-bill-materials-bom/



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numberwang said:

Retail price is typically twice the production cost. Sony has to take a big L in the beginning here.

Compare to the iPhone XS with comparable component costs.

As part of its teardown, TechInsights estimated the cost for each component. Its total is $443, as compared to the $1,249 price tag for the product. So just 35 percent of the purchase price goes to pay for the actual hardware.

https://www.cultofmac.com/579177/iphone-xs-max-production-cost-bill-materials-bom/

Smartphones are a rip off. Consoles are a damned good deal. 

Any company making over $1.15 for each dollar they spend, is price gouging customers. 



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Nu-13 said:
shikamaru317 said:

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).

Given they make more money on digital sales and subscriptions now, you would think they'd be a little more willing to sell at a loss. Especially MS since they have Game Pass.

Now that I think about it, it's very likely I may buy a Series X at launch simply because I won't need to buy games to enjoy it. I will just access content via Game Pass.



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500$, with 3 month PSN.
lock it.



Between MS and SONY, the company who manages to sell their next gen console for 399$ wins, regardless of their "exclusive" content.



LurkerJ said:
Between MS and SONY, the company who manages to sell their next gen console for 399$ wins, regardless of their "exclusive" content.

Yes, because MS is suddenly going to do fantastically in Europe and Japan, because PS5 is $500. 



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