It will take roughly 3 to 3:5 full prices games sold digitally before they make even with disc based ps4. The software attatchment rate is over 10, with over a billion games bought. They will make their money back in a ywar or 2.

Heh, yeah it's pretty farfetched to think someone like Pachter might be wrong on something.

I think he does it on purpose to mislead other analysts lol

They should've made the PS5 $450 if the All-Digital was going to be $400. And I could care less about Sony's profits. I don't want PlayStation to go away, but I'm glad there is a $400 PS5. I will choose my fellow gamers and customers over these corporations.

If they lose $50 per system, and they gain $6 per digital game over physical game sold, and the attach rate is 10 games per console, and 50% of sales are digital regardless of console type, then Sony cannot make their money back. They would only get $30 back over the life of the console. There are some guesstimates in my math, but it should be in the general ballpark.

Also, let's say Sony does have a way to make the $50 back over 4-5 years. That's still a losing proposition because they had to put up $50 4-5 years earlier. Considering a 7 year console life cycle, I think they'd need to make about $125 additional over that 7 years to be worth the upfront investment of $50. And, there is essentially zero chance that they can pull $125 extra out of the average digital edition console owner.

On the other hand, people are also right to note that the math changes when the BOM changes down the road.

And, with all of that said, Sony certainly has better numbers available to do this math, and they determined that the diskless system made sense for them. They're more likely to be correct about their own business than any of us are.

Edited to fix multiple typos

Patcher's math only works if he expects those that buy the PS5 digital wont buy any games or PS plus, and that they don't unbox it or only use it as a piece of home decor lol

Selling at a loss on launch should almost be expected. That first year and the marketshare that comes with it is priceless. You only need to look at how quickly the PS3 became profitable, considering the insane amount they were losing at launch.

I dint agree with him. The losses will be more than made up with digital purchases and the selling at a loss will only be for so long. And it's not going to be like a heavy PS3 loss, probably less than half of that.

I think Sony "blew it" simply by offering a digital only edition.  I know why they did it.  They are worried about Microsoft. 

Microsoft's strategy is to destroy Gamestop and the used game market in general.  They have been trying to do this since the initial presentation of the XBox1 when they included DRM that restricted the use of used/shared games.  They are trying another approach now with Gamepass, but it is all to destroy the second had market.

Sony does what they always do.  They hedge their bets.  They see Microsoft or Nintendo doing something ballsy and they put out something kind of like it "just in case".  That's what this all digitial console is.  Microsoft has a cheap new system with a cheap streaming service, so Sony puts out a cheap-ish digital system just in case Microsoft's business model really takes off. 

The problem with going all digital is that it screws over retailers.  It doesn't just screw over Gamestop but all retailers.  Microsoft is fine screwing over retailers, but Sony should not be fine.  Retailers are only selling the consoles, because they can sell games.  Retailers only make profits on the games.  Without physical games what will happen to the hardware?  The price will have to go up to near PC prices.  Retailers will demand they make money on hardware or simply stop selling it.  Again, if consoles end up priced like PCs, then Microsoft wins.  That ends up helping the PC market a ton.  Screwing over retailers is what will make Microsoft win.  But Sony loses in this scenario.  Sony's business model works, because console hardware is a lot cheaper than PC hardware.  An "all digital" future is one where Sony loses permanently.

So, it kind of doesn't matter if the all digital system is priced at $450 or $400.  Sony is losing just by offering it.  They need to do what they can to keep physical media around.  Because the all digital future will drive up console prices, and that helps Microsoft, because it helps the PC.

The digital edition will make much more money for them, long term. Plus, it pushes the all digital future.

Fyi this is the same guy who called Netflix a 'worthless piece of crap' back in 2005. And look how that turned out.