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[Sosokrates]

$399 is the sweet spot. It's a price that is affordable to many and would be great value for 8core zen 2, 8-10tflop, 16gb gddry and 1tb SSD.

If the aim is to sell as many consoles as possible, then a $399 console is the better way to do it, the most expensive and most powerful have never been the "winner" of a gen.

So if a $399 machine would mean greater prosperity for Sony why would they decide on a more powerful $499 console? It makes no sense!

 

[daemissary]

Because their goal isn’t to sell the most consoles possible...it’s to make the most money possible.

 

[JareBear: Remastered]

$399 is the sweet spot. It's a price that is affordable to many and would be great value for 8core zen 2, 8-10tflop, 16gb gddry and 1tb SSD.

If the aim is to sell as many consoles as possible, then a $399 console is the better way to do it, the most expensive and most powerful have never been the "winner" of a gen.

So if a $399 machine would mean greater prosperity for Sony why would they decide on a more powerful $499 console? It makes no sense!

Because a 449-499 dollar PS5 with 2080+ levels of power, a good cpu, decent amount of RAM, ultra fast storage, and UHD-BR player will sell plenty and minimize loss per unit. These things cost money. Plain and simple. Standard SSDs are more affordable than ever but still not dirt cheap and the SSDs in these consoles are supposed to destroy SATA drives

These consoles are purported to be more powerful than single GPU cards that cost 499 or more, unless the PS5 really is just 9 TF, in which case they start the gen gimped to hell, and I doubt that’s gonna be the case. IF the PS5 is a 9 TF machine, then go for 399. I’ll still buy it but that’s gonna be a bummer in my mind

PS3 was 2006. Things have changed.

 

[sonomamashine]

Because they are not in the charity business, simple as that.

 

[GamerEDM]

its all about the benjamin's

 

[MiyazakiHatesKojima]

These consoles are purported to be more powerful than single GPU cards that cost 499 or more, unless the PS5 really is just 9 TF, in which case they start the gen gimped to hell

Insane how good of a value consoles are compared to a PC.

Should've told my friend not to jump on that ship too soon

 

[Gavin Stevens]

Because they’re not at home to mr cock up.

 

[NickFire]

Because their goal isn’t to sell the most consoles possible...it’s to make the most money possible.

I'm not so sure those are mutually exclusive yet, and I don't care how much Google might say otherwise.

 

[Sosokrates]

Are you guys missing something,

Larger install base = more subscription and game sales = more profit for Sony.

I would personally love if they went more powerful, but what I and other graphics whores like is not what makes the most money.

 

[Ellery]

They want to sell it as high as they can get away with.

It is much more complicated than it sounds and there are a lot of moving parts involved. It also has a lot to do with manufacturing availability and the amount of consoles you can reasonably supply during the launch window.

If you consider inflation aswell then $399 is not a big asking price for things nowadays. I don't disagree with you. I think $399 is awesome and they should aim for that, but it doesn't mean that they can/are trying to, because they want to maximize profits and it is a bit of a guessing game of supply and demand. The console is probably going to sell out at $399 and the same applies to $499. No idea how it'd be if it was higher than that.

Sony can always reduce the price afterwards if the demand for a more expensive console is lower than they expected.

Perfect case : Huge PS5 supply. Huge PS5 demand. $399 price -> gigantic install base exceeding PS4 and Sony making lots of money from digital services and game sales. More consoles sold -> more money for the amazing first party studios through sales -> more money for new games etc.

Reality : no idea my guess is $499 because of inflation, cost of labour and more advanced hardware RELATIVELY SPEAKING (compared) to when the PS4 launched.

 

[Vawn]

$399 is the sweet spot. It's a price that is affordable to many and would be great value for 8core zen 2, 8-10tflop, 16gb gddry and 1tb SSD.

If the aim is to sell as many consoles as possible, then a $399 console is the better way to do it, the most expensive and most powerful have never been the "winner" of a gen.

So if a $399 machine would mean greater prosperity for Sony why would they decide on a more powerful $499 console? It makes no sense!

Why don't they sell it for $9.99? Getting under ten bucks will surely increase sales significantly. It just doesn't make sense!!!

 

[FranXico]

Insane how good of a value consoles are compared to a PC.

Should've told my friend not to jump on that ship too soon

Better value on the hardware side, not so much on the software side.

On PC you need a higher upfront investment (assuming you want a high end machine), but software is much more accessible in general.

 

[Celcius]

It's 2020 and $400 isn't enough anymore.

 

[sonomamashine]

Insane how good of a value consoles are compared to a PC.

Should've told my friend not to jump on that ship too soon

Nobody should discuss with you anything after you let your friend buy that laptop

 

[Valonquar]

They could add the words "launch edition" to it and still sell out for $699

 

[NickFire]

Why don't the sell it for $9.99? Getting under ten bucks will surely increase sales significantly. It just doesn't make sense!!!

Know what makes even less sense? I'll tell you. At one point double cheese burgers were cheaper than cheese burgers at McDonald's. Not only that, until fairly recently you could get 12 nuggest cheaper than 10 by ordering 3 of the 4 pieces. Those days are gone unfortunately, but they were not that long ago.

 

[stitch1]

Yep, same reason they don't sell them at $299 or $199. They aren't in the business of losing money.

 

[Enjay]

Wait for the slim and pro models to come out.

 

[SLoWMoTIoN]

It will cost 599 at launch and you will buy it!

 

[jshackles]

They would probably be more successful selling them with a monthly rental fee for the dumb-dumbs or people who couldn't afford the initial purchase. For some people $30 a month forever is more affordable than $500 up front.

 

[Sosokrates]

They want to sell it as high as they can get away with.

It is much more complicated than it sounds and there are a lot of moving parts involved. It also has a lot to do with manufacturing availability and the amount of consoles you can reasonably supply during the launch window.

If you consider inflation aswell then $399 is not a big asking price for things nowadays. I don't disagree with you. I think $399 is awesome and they should aim for that, but it doesn't mean that they can/are trying to, because they want to maximize profits and it is a bit of a guessing game of supply and demand. The console is probably going to sell out at $399 and the same applies to $499. No idea how it'd be if it was higher than that.

Sony can always reduce the price afterwards if the demand for a more expensive console is lower than they expected.

Perfect case : Huge PS5 supply. Huge PS5 demand. $399 price -> gigantic install base exceeding PS4 and Sony making lots of money from digital services and game sales. More consoles sold -> more money for the amazing first party studios through sales -> more money for new games etc.

Reality : no idea my guess is $499 because of inflation, cost of labour and more advanced hardware RELATIVELY SPEAKING (compared) to when the PS4 launched.

So you are saying a $399 console in 2020 is not possible?

 

[Sosokrates]

They would probably be more successful selling them with a monthly rental fee for the dumb-dumbs or people who couldn't afford the initial purchase. For some people $30 a month forever is more affordable than $500 up front.

That's a good idea (lol I'm a dumb dumb)
Haven't Microsoft already done this with Xbox and gamepass? Gamepass platinum or something.

 

[Vol5]

Sony aimed for $399 for PS4 and broke even on the hardware almost immediately. I think they can afford to be a little more opulent with the hardware and keep it at $399 with PS5 taking a loss for the initial year say. Plus they have huge buying power that should reduce the BOM significantly.

Although....NVMe SSD, RT, Zen, NAVI based? $399 could be a stretch this time around. Perhaps Mark Cerny's words around "value for the tech" is a hint that it's coming in higher than $399. It depends on what kind of deals they can strike behind closed doors.

 

[jshackles]

That's a good idea (lol I'm a dumb dumb)
Haven't Microsoft already done this with Xbox and gamepass? Gamepass platinum or something.

Yep - Xbox All Access and I assume they'll be hyping this option through the roof when the Series X launches.

EDIT: for the record, I'm not advocating anyone actually take Microsoft up on this offer - after two years you've paid nearly $800 for your One X + subscriptions.

 

[Moses85]

It will cost 599 at launch and you will buy it!

He probably not, we, definitely!

 

[Eliciel]

Because their goal isn’t to sell the most consoles possible...it’s to make the most money possible.

it's incredible how incredibly easy it's explained.

OP go read an article on price-elasticity. While on the "hunt" for important knowledge also try reading some bits and pieces on giffen goods and on artificial scarcity.
Wanting things you don't want to buy or you can't buy is implicitly improving the demand on the good itself..You would lose so many revenue layers if you position this product at $399 - it would be a travesty from a sales strategy and pricing strategy perspective selling the console at $399....

Short and absolute helicopter view example for you to understand how important is to value your product correctly:
20,000,000 consoles * $599 = ~$11,980 bn
31,000,000 consoles * $399 = ~$11,970 bn
55% more consoles sold for 0% more revenue- how is this calculation looking for you as a executive of a multi-billion-dollar company?
Cost decrease over time, revenue isn't. If you price correctly and exclude price cuts for 1-2 years you profit quite heavily for any advantage you create in production cycles.

Neither is Sony looking to sell-out its golden content portfolio undervalued nor is Sony altruistically driven to make you smile. You heard right! No, this is not for the players! Yes, this is pretending being for the gamers while leveraging most value out of the perception that this would be for the gamers - if anything, it's time to p(l)ay - are you ready to p(l)ay?

Get ready to pay the big bucks my friend. Get ready to pay EASILY 450 for the next generation console and be well prepared to pay even more than that.
No matter what...it's going to be a hell of a ride and it's going ot be far better than paying 500 for a seasonal family ticket for the Universal Studios in Orlando - I promise you that.

 

[phil_t98]

Are you guys missing something,

Larger install base = more subscription and game sales = more profit for Sony.

I would personally love if they went more powerful, but what I and other graphics whores like is not what makes the most money.

People will go where the power is, don’t forget the biggest sellers are always the multiplatform games. They need to equal Xbox Xs power

 

[Ellery]

So you are saying a $399 console in 2020 is not possible?

Have you read my post?

I have never made such a statement.

I think $399 is "easily" possible for Sony. I hope it will be $399. I think there is a real chance it is $399, but my gut tells me it is going to be $499 or $449.

I simply said there are a lot of factors involved. Sony can sell it for $399 at a loss yeah sure. I hope they are going to, but that doesn't mean they are going to do that.

The biggest difference between 2013 PS4 and 2020 PS5 will be that the PS5 is going to have "cutting edge" (for the lack of a better word) technology. The PS4 in 2013 had old hardware from early 2012 that was used in mid range PCs.
In 2020 the PS5 will have AMD RayTracing features from silicon that is not available right now as we are speaking !

 

[sonomamashine]

I think $399 is "easily" possible for Sony. I hope it will be $399. I think there is a real chance it is $399, but my gut tells me it is going to be $499 or $449.

I simply said there are a lot of factors involved. Sony can sell it for $399 at a loss yeah sure. I hope they are going to, but that doesn't mean they are going to do that.

Very contradictory right there.

 

[Ellery]

Very contradictory right there.

What part does confuse you? Maybe I can help you out a bit if you need help.

 

[sonomamashine]

What part does confuse you? Maybe I can help you out a bit if you need help.

No thanks, i'm sure i'll get more confused

 

[Sosokrates]

Because their goal isn’t to sell the most consoles possible...it’s to make the most money possible.

And how do they make the most money?

 

[Vawn]

And how do they make the most money?

Not by losing hundreds of dollars on every console they sell. That's for sure.

We already know it is costing them close to $500 just to manufacture the hardware before shipping, marketing, etc.

 

[SleepDoctor]

Sony drops an 8tf ps5 and I'll wait on the ps5 pro

 

[jshackles]

Sony has billions of dollars in cash they could burn if they wanted to. They could strategically sell the system at a loss if they chose, knowing that 1) they would likely make up the difference in software sales / subscriptions and 2) the cost of manufacturing will decrease over time to the point where they would no longer be selling the hardware at a loss.

That being said, Microsoft has significantly more cash on hand and could employ the same tactics.

Whether or not that is a worthwhile endeavor for them, that's another story.

 

[spawn]

Because they don't want to lose money with every console sold. I think if Microsoft announces $399 for xbox series x then Sony will most likely match and hope they recover with ps plus subscriptions and software sales

 

[diffusionx]

Because a 449-499 dollar PS5 with 2080+ levels of power, a good cpu, decent amount of RAM, ultra fast storage, and UHD-BR player will sell plenty and minimize loss per unit. These things cost money. Plain and simple. Standard SSDs are more affordable than ever but still not dirt cheap and the SSDs in these consoles are supposed to destroy SATA drives

These consoles are purported to be more powerful than single GPU cards that cost 499 or more, unless the PS5 really is just 9 TF, in which case they start the gen gimped to hell, and I doubt that’s gonna be the case. IF the PS5 is a 9 TF machine, then go for 399. I’ll still buy it but that’s gonna be a bummer in my mind

PS3 was 2006. Things have changed.

None that shit sells consoles. Nobody will spend $50-$100 more because you throw some fancy buzzwords at them. Nobody gives a shit about Zen 2 - it literally means nothing to the vast majority of the market. If they cared about Zen 2 they would have built a PC around it when it came out last year. People want affordable, convenient, easy to use boxes with good games they can play with their friends. When you start moving away from that you lose people, you just do. Once you start getting above $400 you get to "eh I'll just keep playing my old system" territory.

Times have not changed nearly as much as you think. These things are luxury items, and console makers can't dictate terms to the market.

 

[sonomamashine]

Sony drops an 8tf ps5 and I'll wait on the ps5 pro

You wont have to, aint happening.

 

[Ellery]

Sony has billions of dollars in cash they could burn if they wanted to. They could strategically sell the system at a loss if they chose, knowing that 1) they would likely make up the difference in software sales / subscriptions and 2) the cost of manufacturing will decrease over time to the point where they would no longer be selling the hardware at a loss.

That being said, Microsoft has significantly more cash on hand and could employ the same tactics.

Whether or not that is a worthwhile endeavor for them, that's another story.

Be careful. Applying logic and a reasonable approach (because we as consumers don't know) might confuse people.

 

[darkinstinct]

$399 is the sweet spot. It's a price that is affordable to many and would be great value for 8core zen 2, 8-10tflop, 16gb gddry and 1tb SSD.

If the aim is to sell as many consoles as possible, then a $399 console is the better way to do it, the most expensive and most powerful have never been the "winner" of a gen.

So if a $399 machine would mean greater prosperity for Sony why would they decide on a more powerful $499 console? It makes no sense!

Let's look back. It's early 2017. Sony is designing the next Playstation. They are outselling Xbox by more than 2:1 and Wii U is dying a slow death, Switch is about to launch. With basically Android mobile specs. Do you try to repeat your success? Of course you do. And that 399 price point was how you got there. You decide to keep it. You know that Microsoft plans to release their "Pro" console later in the year. That makes it highly unlikely that they can do a next gen launch just two years later. And you promised already that this generation won't take as long as the last one did, when it was seven years for PS3. So six years it is. A launch in late 2019 is planned and despite trying to hold that 399 price point, Cerny goes all-in. By using the RDNA architecure that is supposed to launch in early 2019 you make sure that you have state of the art AMD hardware. An 8 TF APU is basically top tier, you bundle it with a Zen 2 CPU. All is good. Then in 2018 it becomes obvious that RDNA is delayed. Will you be able to get enough chips for a console launch? Things get ugly. But you keep your focus, it will work out.

Then in March Microsoft shows DXR. Raytracing. No hardware exists yet. But could they be planning to use raytracing in their next Xbox? That would put PS5 at a huge disadvantage. You are worried. Then the RTX cards come out and they are prohibitively expensive. You exhale. 2019 it is. Enter 2019. A leak comes out and nails what you have. And it talks about raytracing in Microsofts console. And not only that, it talks about a more powerful SKU and a cheaper SKU. You are scared. The core gamers are very profitable and the mass market is equally important. Microsoft seems to eat away at your install base from both sides. And they have raytracing.

It is then decided to delay the 2019 launch to 2020, to spend the time on creating your own raytracing solution and to narrow the gap to Xbox while doing so. In mid 2019 you test your first iteration of this upraded APU. It needs to run hot, because there simply isn't enough time for a full redesign. And you don't want to go from a one year lead over Microsoft to trailing them by one year. You remember how that worked in the PS3 generation. It has to be 2020, no matter what. You join forces with a tech startup called LocalRay that specializes in software based raytracing by running on GPU hardware shaders. It's not a one way relationship, you give them access to your IP and they show off Spider-Man with their technology at Siggraph 2019.



But things don't go according to plan. The device runs too hot and the raytracing co-processor that is based on a repurposed PS4 Pro GPU requires several iterations of the APU. And then a spike in DRAM and NAND pricing because of issues at your provider Samsung in November 2019 and January 2020 leads to a sharp increase in cost. You can't hold your 399 price point anymore. You have to launch a weaker console at 499 while you know that Microsoft will do a 180 and launch for 399. You are screwed.

 

[Sosokrates]

From the recent Bloomberg report that the PS5 BOM is $450 and that Sony was "struggling" to reduce costs due to higher then expected dram and band prices, I think suggests they actually we're targeting a $399 RRP with a small loss.

I think if Lockhart is a thing for $299/$349 Sony will go for $399/$449.

 

[Ellery]

From the recent Bloomberg report that the PS5 BOM is $450 and that Sony was "struggling" to reduce costs due to higher then expected dram and band prices, I think suggests they actually we're targeting a $399 RRP with a small loss.

I think if Lockhart is a thing for $299/$349 Sony will go for $399/$449.

Remember that $450 is without other costs including shipping and retailer cuts/fees.

 

[Romulus]

Even at $499, that's barebones in 2020. At least give them a fighting chance to come up with something halfway decent. PS4/Xbox one were trash other than the toolset for developers. Everyone was shocked at how terrible the cpu choice was, and the GPU was well below average. $399 gets you LESS than it did in 2013, because parts cost more. Let's not go down that road again. $499 is scary low for everything remotely powerful, $399 is a joke.

 

[Kenpachii]

Are there any plans or rumors for 2 ps4 sku's?

 

[Great Hair]

Are you guys missing something,

Larger install base = more subscription and game sales = more profit for Sony.

I would personally love if they went more powerful, but what I and other graphics whores like is not what makes the most money.

Yup. They should have lowered the price of the ps4 to $199 already. Get a loss in hardware, but make up for it by selling more software and subscriptions (PS+ and PSnow).

PS4@$199
every publisher sells more titles, sony gets more subs for ps+ or psnow

PS4@$299
only EA keeps selling million copies of FiFO, few more getting ps+ ...

 

[Hawking Radiation]

Why doesn't Ferrari sell their F8 Tributo for like $20 000. That would be the sweet spot cause i could then afford to buy one.

Thing is Ferrari won't be around much longer if they do cause they'd go bankrupt.

 

[daemissary]

And how do they make the most money?

Pretty simple really...they do that by selling as many consoles as they can at the highest profit margin possible at launch, then lowering the price once their costs come down to sell additional units to people who are price sensitive while maintaining a profit throughout the entire process.

Selling consoles at a loss is generally bad business. Sometimes it is necessary to keep up with or undercut a competitor but they aren’t going to just “make up for it with subscription fees.”

 

[Sosokrates]

Remember that $450 is without other costs including shipping and retailer cuts/fees.

Indeed. If that cost is true then they will break even at a $499 RRP.

However they could of still planed for a $399 machine, maybe they were expecting a BOM of $395 and a total cost of $440 , and they would take a $41 loss per console and have a $399 RRP. I think the best we can expect now is a $449 rrp

 

[ethomaz]

If any company is $399 the other is doomed no matter the specs.

Said that I hope they aim to high specs even if $499.

 

[Sosokrates]

Pretty simple really...they do that by selling as many consoles as they can at the highest profit margin possible at launch, then lowering the price once their costs come down to sell additional units to people who are price sensitive while maintaining a profit throughout the entire process.

Selling consoles at a loss is generally bad business. Sometimes it is necessary to keep up with or undercut a competitor but they aren’t going to just “make up for it with subscription fees.”

They will probably make a loss or break even @ $499, so with a lower initial price they can get to a higher install base quicker and thus have higher game sales and subscriptions for a longer period of time.