Don't look at the power... thats really nothing at all. Look at the component costs.

eg.. in 2013, $35 would have got them a 500GB HDD. In 2017, that same $35 would get them a 1TB HDD.

In 2013, sony's 8GB of RAM, made from 16 x 512MB chips in a clamshell config cost them $88. so that's basically $5.5/chip. or $11/GB. Then in 2016, they were using 1GB chips on a smaller fab process instead of 512MB chips and that cost them $6/GB. 

In 2018/2019, 1GB 14Gbps GDDR6 chips (the type the PS5/XSX uses) had a component cost of $11. And that was before they shited fabrication to 7/8nm processes. Once they did, they now have 2GB GDDR6 chips, which with how these things typically go will just end up costing around $12/$13 per chip while 1GB chips dro in prie instead.

And what prices sony/MS (more sony than MS) would get from these vendors would be better than you ould find almost anywhere else in the industry. And that has more to do with the volume of orders they would be making at once.

Or more on the chip... a 325mm2 APU on a16nm process takes up the exact amount of space a 325mm2 APU on a 7nm process takes up. But when they say this process is more costly than that, its not like they mean its like two times the price something. Its more like a 20 - 30% premium that comes down over time as the fabrication process matures (aka yields improve). 

Another way to look at all this is, in 2013, it cost sony $380 to make a PS4. In 2016, the same $380'ish would have made them a PS4pro. What do you think $380 would make them in 2020?

Sony might be able to afford this, but pricing of the competition and the current strong position in the market allow Sony to go higher, and I think they will try tto not lose too much money. I imagine Sony is confident enough to match XSX at 499 and lose more money on the discless model at 399 because there's more profits to be had there from games. I do think 449 for the disc model sounds like a pretty sweet spot otherwise, but it's only 50 less than 499 (so possibly not much advantage against XSX) and it looks way worse than 399. I think it's either 499 or 399, and I'm leaning towards 499.

That said, by now Sony is probably very well aware of the importance of price, and a price of 399 could win some marketshare. I think all things considered, Sony will still choose short-term profits, but I wouldn't be too surprised at 399 either considering XSX isn't higher than 499.

As for the discless model, it's probably either 349 or 399 depending on the price of the disc model. 299 is out of the question because all the discless model lacks is a disc drive so no cutting other costs there, and 449 in case of 499 for the disc model is way too close to the disc model and way too high compared to XSS at 299. If the discless model is 349, I imagine Sony would prefer to price the disc model at 449 instead but like I said, due to competition I imagine Sony won't do that.

I just read that Sony has had major losses across the board due to Covid-19 and that they are short term not doing well. Game department was pretty much the only profit. While selling PS5 at a lower price than they would have will help them a lot more in the long run, selling the device at a loss or significant loss may put their short term finances, as a whole company, into dangerous territory.

I don't particularly like PlayStation brands/products, and have never bought any, but I want them to be in a healthy situation as they push Nintendo and Microsoft and the whole gaming industry forward, just as the other two do as well.

If Covid-19 keeps up, Sony may have to do a lot of restructuring to stay afloat at this rate. I could see PlayStation spinning off to some other company in order to get the cash they may need. Movies are bombing left and right or simply being delayed from release. PlayStation is safe regardless, but I'm not so sure about Sony.

https://www.google.com/amp/s/www.marketwatch.com/amp/story/sony-profit-revenue-fall-below-expectations-2020-05-13

https://sonyreconsidered.com/sony-q1-2020-earnings-overview-revenue-2-profits-1-f467dafe5609

First off, what is a "huge loss"? If my estimates are accurate, they would be losing $70 on the $399 PS5 SKU and $90 on a PS5D SKU. When people talk about the loss I don't think they really take the past into consideration. Do you know how much sony lost on the sale of every PS2 back in 2000? $150. That's a $150 loss on a $299 console!!!! Then with the PS3, they bit a $200+ loss on every unit sold. And my estimates has the loss they would take range between 70 - $90. You can even tack on another $20 there just in case and its still only $110 loss max. That's not even as much as they lost on the PS2 back in 2000. That's $230 in today's money.

History dictates that at the very least, a $150 loss isn't of the table especially considering how much more profitable the plantation divisions now compared to in the PS2/PS3 generations.

Secondly, Sony has actually come out and said they want this to be the fastest transition into a new gen ever. How else do they manage that if not aggressive pricing? And why would they do this? They aren't doing this to "sell", they can sell just fine at $399/$499. They are doing this to sell "quickly". Its like people forget that the console is just a gateway to an ecosystem. I sony could somehow manage to sell 100Mconsolesin 3 years and not sell more tan 5M consoles a year for the next 4 years? Trust me, they would be very very very happy.

I don't think Sony is going to want to lose 100 eurodollars with each sale, or they'll be right back to where they were during the PS3 years, so I doubt it.

I just want to add why do people assume the PS5 sku gap is $100? No way a disk drive is $100. $50 in cut costs sounds more about right. OP got that part right at least. 

That would be awesome and end the console war real fast. However, I expect it to be PS5 DE $399 and disk PS5 $449-$499.

Lol... that bigger SSD theory is nonsense. Its practically impossible.

The PS5 uses 64GiB nand flash chips. One on each of its 12 channels. 64Gib x 12 = 768GiB = 825GB. Data is read from all chips simultaneously (like RAM) and that's how it has its 5.5GB/s speed. The only way the PS5 has a bigger SSD would be to go up to the next available NAND flash chip, that's a 128GiB chip (what's used in the XBSX/S). And the PS5 would end up with 1.65TB instead.

The covid rumor came up around the $450 BOM rumor too, and then it was suggested that sony was having a hard time keeping prices down. But more recent rumors suggest that both costs of the APU and the RAM are down now, for the APU it's due to "better than expected yields" and fo the RAM its due to reduced demand due to a fall in smartphone sales. That means that its actually more likely than not that the BOMis actually lower than that $450 rumor now.

The $100 expected gap doesn't come from what people think the cost of a BR drive is. We all know it doesn't cost $100. It doesn't even cost up to $50. That expectation is coming from what is more marketable and the fact that we expect Sony to be trying to push people towards buying the digital SKU instead. They stand to make more money from digital SKU console than a physical one.

So if the disc version is $499, then the most likely cost of the disc-less SKU would b $399. As $449 doesn't have the same ring to it and doesn't give enough of an incentive to see the PS5D as good value over the disc version. But if aspermy prediction the PS5 ends u being $399, then selling the digital SKU at $349would stillhave great value.

I wouldn't be surprised if price drops are announced for all PS4 SKUs on Wednesday. Or at the very least sometime just before the launch of the PS5. There is no reason for them to cut the price now.

As for the SSD, I could give ou a massive breakdown on exactly how I think its made, but I'll say this, it's not inexpensive as you may think it is. Sony was very very very smart about how they designed it. Actually, they were very smart about how they designed their entire system.

The SSD in the PS5 exists and performs in a way that can only be accomplished in a console. In a device where every single component is built to complement each other. To put it simply, sony isn't using DRAM in their SSD (just like MS), but unlike MS that instead uses a chunk of its system RAMfor their SSD cache, sony instead built SRAMright into the APU for theirs. Its significantly faster than DDR3/GDDR6 RAM, but obviously smaller, this means they would only need a very small amount of their GDDR6 system RAM o to augment it while at the same time getting overall better performance.

Basically, sony's SSD is actually made up of their APU, SSD, and system RAM. For MS it's their SSD and system RAM. That's not something PCs can do. Going about it this way actually makes their SSD cheaper than it would have otherwise had to be.

I don't see this happening. Sony is already taking a loss. I think they're far more comfortable selling the PS5 at $449.99 or $499.99. I don't think the All-Digital Edition will be under $399.99. And if it's $349.99, then the normal PS5 will be $449.99.
Sony has exclusives and a more dominant brand to fall back on and still justify $499.99 for the PS5. The difference in specs for the PS5 and Xbox Series X exist. But they're not enough to justify much of a price difference.