Sony is struggling to keep its pricing of the new PlayStation 5 competitive, citing scarce parts and higher components for the console. According to the report from Bloomberg, the tech giant is struggling to obtain parts, increasing the price of the console to $450.
DRAM and NAND flash demands grow as prices skyrocket
The PlayStation 5 looks to be a fast gaming console in the market. Sony boasted that its new console would use SSD storage solutions to reduce load times as its reliable and doesn’t eat as much physical space as a traditional magnetic disk drive. It’s been hard for Sony to get hands-on DRAM and NAND flash storage due to the high demand. Not only Sony, but Microsoft, Samsung, and other companies are demanding DRAM for their new product. Although there have been no DRAM shortage reports regarding DRAM by Microsoft.
Sony is competing with Microsoft in the console segment of the market. Microsoft and Sony both are due to release their upcoming consoles in the Holidays of 2020. Microsoft has already unveiled its Xbox Series X console. Sony has just displayed their PS5 logo ( It looks the same as the old logo, what are you emphasizing on Sony?) with some leaked images of the Dev kits. The Dev kits looked impressive with the V-shaped design referring to the 5th PlayStation console.
The Xbox Series X and Sony PlayStation share the same hardware power. Both will have an AMD Ryzen 7nm Zen 2 architecture processor as the brains, and AMD RDNA architecture based NAVI GPU to drive the graphics-intensive title with hardware-based Ray-Tracing. The SSDs will be the main integral factor for the console. As the SSD prices soar high, so does the cost of the console.
Sony is aiming to sell the console for well above $450. It costs $450 to produce a single PS5 unit. Sony has chipped in more money on the console giving attention to the cooling system. PS5 will come with a new and improved thermal solution to stop the console from overheating and keeping the fan acoustic to the minimal.
Sony holding back launch price of the PS5 to undercut the Xbox Series X
Sony sets the value of the new console in February of the launch year. But the price of the PS5 still hasn’t been finalized. Sony canceled their appearance in E3 this year to prepare for the launch of the console. The PS4 cost $381 to manufacture and was sold for $399. If Sony aims to repeat the previous pricing scheme, the PS5 can cost $470. But due to the intense competition from Xbox, it doesn’t look like this strategy will work.
“We must keep PlayStation 5’s bill of materials under our control, and we need to make the correct number of units in the initial production,” – Sony Chief Financial Officer Hiroki Totoki
Microsoft is likely to announce the pricing of the Xbox Series X during E3 2020. Sony looks to undercut the Xbox by keeping its price of PS5 competitive. It’s up to Sony whether they want to sell the product with loss or gain some profit or even sell the product at the same price as the Xbox.
The PlayStation 5 is already on a tight spot. Microsoft has its own Xbox Series X console and even a rumored Project Lockheart console. According to the reports. Microsoft is creating another console with the same spec reducing some significant features on it. It is a similar concept to the Xbox One S, an exclusive digital console.
If both console prices are similar or the same to each other, I emphasize the loyalty of the consumer. Sony has a larger fan base and loyal followers with their console exclusive and better online services. So even if the PlayStation 5 sells for $500, the loyal consumer will pay $500 to own the device.
Sony can also make back the money if they choose to sell the console for under $450. The company has been earning money from game services, licensing, etc. and can recoup the loss of selling the console at a lower price. Sony claimed that the success of the console is determined by the active online users rather than the number of consoles sold. The older PlayStations have sold over 100 million units, and Sony had to conjure the loss of only the Sony PlayStation 3.
As E3 nears, both companies are gearing to announce their console. But the MSRP or the release price of the console isn’t a big deal for average consumers. An average consumer can buy the console at a lower price as the value of production of the console reduces year by year. So unless you are a keen buyer, we suggest you wait for price drops.