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ConservagameR on 26 August 2022
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the-pi-guy said:
ConservagameR said:

This is just speculation, but since MS may have paid for extra chip production, helping to keep shelves full and keep sales momentum up, isn't it possible that Sony finally ponied up and did the same, though very quietly? So far anyway perhaps?

Sony can easily justify upping the PS5 price somewhat based on (years of) demand, plus hardcore scalping hikes.
If Sony can increase supply while doing so in this case, who's losing, really?

* "While this price increase is a necessity given the current global economic environment and its impact on SIE’s business, our top priority continues to be improving the PS5 supply situation so that as many players as possible can experience everything that PS5 offers and what’s still to come."

As for the XB response, yes, MS has decided to mostly compete this gen using non gaming related banked cash. It's real nice until that stops, because it will eventually stop, one way or another.

MS also has a big advantage for chip production, with regards to the Series S. The chipsize is about 2/3rds the size of the PS5. For the same amount of wafer space, MS is able to make 50% more consoles.

Frankly MS doesn't really need to up their prices. A big reason for this is that the US currency is largely doing very well relative to Europe/Japan/etc. Sony sells a lot of their consoles in those regions, where their currency is devaluing; so they're losing money relatively. MS sells a larger chunk of their consoles in the US, where their consoles aren't being devalued.

Yes, the Series S is the exception. Now if they've paid for even more production on top of that advantage anyway?

Game Pass says it all. MS will subsidize like $100 billion if they must, to compete with XB. Sony in it's entirety is only worth like double that.

the-pi-guy said:
Lucca said:

Wait, wasn't the PS5 already turning a profit at $499 a year ago? A price increase doesn't seem like that much of a "necessity", as they say. I'd guess it's more to do with Sony wanting the PS5 hardware to not be sold at a loss anywhere at this point.

Chip prices have been increasing. 

“Foundries have already increased prices 10-20% in the past year,” Bain semiconductor analyst Peter Hanbury told CNBC. “We expect a further round of price increases this year, but smaller (i.e. 5-7%).”

So their margins are getting slimmer than they were.

And the big motivation here is currency related. Makes their margins even smaller if they exist at all. It was a big factor in why their recent income was not where it was expected to be.

Chip demand has increased a lot and (future) production is behind a bit as well, which just makes it worse.