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Bloomberg - Sony cuts PS5 production by 4 million units, $449 and $399 price




It is clear that Sony has revised down the production volume of the next-generation game machine "PlayStation (PS) 5" to be released within the year by 4 million units in this term (the term ending March 2021) to about 11 million units. Became. The production yield of the specially designed integrated circuit "System on Chip (SOC)", which corresponds to the heart of PS5, is not stable.

Because the information was not disclosed, multiple parties revealed it on condition of anonymity. In July, the company informed its parts suppliers that it would double its production volume, considering that the consumption of nesting due to the spread of the new coronavirus infection would support demand even after the year-end sales season.

According to the person concerned, the production volume has been forced to be reviewed because the yield of SOC is sluggish at about 50%. He said that the yield is improving, but the quality has not reached a stable level. A Sony spokeswoman declined to comment.

Last week, Microsoft sold the "Xbox Series X" for $ 499 (Japan's domestic price is 49,980 yen) and the "Series S" without a disk drive for $ 299 (32,980 yen). Announced to be released on the 10th of March. There is a view that the announcement of affordable prices poses a threat to Sony.

Sony is expected to announce details such as price and release date at the PS5 related video event to be held on the 17th. Masahiro Wakasugi, an analyst at Bloomberg Intelligence, expects the cheapest case to be priced at $ 449 for a model with a disk drive and $ 399 for a model without a disk drive
 
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D

Deleted member 471617

Unconfirmed Member
$400 and $500 is pretty much guaranteed at this point. Don't see only a $50 difference because majority would just buy the disc version instead as that's not a big enough difference to lose out on playing disc based games, new and used as well as being able to trade them in or sell them online. Plus, the digital option is still there.
 

Men_in_Boxes

Snake Oil Salesman
$400 and $500 is pretty much guaranteed at this point. Don't see only a $50 difference because majority would just buy the disc version instead as that's not a big enough difference to lose out on playing disc based games, new and used as well as being able to trade them in or sell them online. Plus, the digital option is still there.

Not so sure about that $50 too small for people to prefer the DE.
 

semicool

Banned
Masahiro Wakasugi, an analyst at Bloomberg Intelligence, expects the cheapest case to be priced at $ 449 for a model with a disk drive and $ 399 for a model without a disk drive

quote....."at the cheapest" so what does the Bloomberg (yes I'm using "Bloomberg" derogatorily, and "Bloomberg Intelligence" is an oxymoron) "analyst" believe it will be at the most expensive end then?
 
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JLB

Banned
Masahiro Wakasugi, an analyst at Bloomberg Intelligence, expects the cheapest case to be priced at $ 449 for a model with a disk drive and $ 399 for a model without a disk drive

quote....."at the cheapest" so what does the Bloomberg (yes I'm using "Bloomberg" derogatorily) "analyst" believe it will be at the most expensive end then?

Yeah, I was thinking the same. Title is a bit misleading. Thats why reading through the end is important ha.
 
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LOLCats

Banned
Masahiro Wakasugi, an analyst at Bloomberg Intelligence, expects the cheapest case to be priced at $ 449 for a model with a disk drive and $ 399 for a model without a disk drive

quote....."at the cheapest" so what does the Bloomberg (yes I'm using "Bloomberg" derogatorily) "analyst" believe it will be at the most expensive end then?
in other words, "total BS" and as good as anyones guess here.
 
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JLMC469

Banned
Masahiro Wakasugi, an analyst at Bloomberg Intelligence, expects the cheapest case to be priced at $ 449 for a model with a disk drive and $ 399 for a model without a disk drive

quote....."at the cheapest" so what does the Bloomberg (yes I'm using "Bloomberg" derogatorily) "analyst" believe it will be at the most expensive end then?

I said it on the other thread. The keyword is analyst.
 
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Highly unlikely Sony will hit $450 with the BR edition. They'd be a $150 loss on each console sold.

Not saying it's impossible as Sony may feel pressured to undercut Xbox Series X due to the Xbox performance advantage, but I'd say it's far more likely Sony will leverage their greater mindshare and exclusive game portfolio to at the very least hit price parity. I'd say it's a 50/40/10 chance with them hitting price parity (50) vs simply launching at $600 (40) so as to break even vs undercutting (10).

At $449 Sony would lose billions on the hardware and need to be very confident of a high attach rate in order to break even in the initial launch window. They aren't a cash rich company to begin with, certainly not to the degree they'd need to be to make this move casually.

That said, from a consumer perspective I'd love it. I'm likely Day One on both new consoles but have been considering waiting for a smaller re-design of PS5. A $450 launch price means I'm in no questions asked.
 

supernova8

Banned
$400 and $500 is pretty much guaranteed at this point. Don't see only a $50 difference because majority would just buy the disc version instead as that's not a big enough difference to lose out on playing disc based games, new and used as well as being able to trade them in or sell them online. Plus, the digital option is still there.

Actually I think $399 and $449 is quite smart. Puts them within touching distance of the XSS (only $100 with double the performance, an SSD that is 2x faster and 3x larger (ish)) and yet undercuts the XSX.

I reckon Sony knows the overwhelming power of having a lower price point. That's why Microsoft priced XSS at $299 - they too know the power of an overwhelming price point.

I think the difference is that Sony (rightly in my view) knows it needs to get the enthusiast gamers on board first to build the initial install base. I don't really know how many enthusiast gamers are going to want to buy the XSS so unless all the casual/mainstream somehow morph into early adopters (like they did with the Wii), I don't see XSS sales taking off like Microsoft wants them to.
 
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Yes - your title kinda implies that Bloomberg is reporting on confirmed (ie publicly confirmed) information (mainly regarding price) but it isn't. It's literally just an analyst at Bloomberg stating his opinion, without suggesting he has any sources for it at all.
Well if that the case maybe mod can fix the title.
 

Clintizzle

Lord of Edge.
Question. Would you feel shit for paying potentially an extra $100 for the same device but with a disk drive?
 

LordOfChaos

Member
399 would be pretty great. 100USD to jump from the gimped version of this gen to the full vision of it.

Though, that's not counting that Microsoft is actually eating some of the foreign conversion like CAD and AUD, which is very nice. If Sony doesn't do that that 100USD conversion grows.
 
Actually I think $399 and $449 is quite smart. Puts them within touching distance of the XSS (only $100 with double the performance, an SSD that is 2x faster and 3x larger (ish)) and yet undercuts the XSX.

I reckon Sony knows the overwhelming power of having a lower price point. That's why Microsoft priced XSS at $299 - they too know the power of an overwhelming price point.

I think the difference is that Sony (rightly in my view) knows it needs to get the enthusiast gamers on board first to build the initial install base. I don't really know how many enthusiast gamers are going to want to buy the XSS so unless all the casual/mainstream somehow morph into early adopters (like they did with the Wii), I don't see XSS sales taking off like Microsoft wants them to.

$399 sounds great and smart and wonderful on paper....if they arent taking a $150-200 loss on the thing. You dont know if its smart if you dont know how much its costing them.

From the looks of it, the ps5 costs every bit as much to make as an xsx, probably more. You have a proprietary SSD that cost a fortune in R&D alone, you have a unique cooling system to cool their ridiculous clocks that they forced because they got caught off guard by XSX’s 12tflops, and then you got the intricate and large formfactor.

I honestly think $399 is a pipe dream, especially considering Sony dominated last gen and arent in the position where they need to undercut MS to maintain their position. Over the course of those 11 million units, a $399 console will cost them an extra $1.1 billion in pure losses compared to a $499 console. im not so sure they NEED to take that hit
 

TGO

Hype Train conductor. Works harder than it steams.
A £38 difference?
I doubt it, then again it'll probably be £75/£100 with their calculator
 
Yes - your title kinda implies that Bloomberg is reporting on confirmed (ie publicly confirmed) information (mainly regarding price) but it isn't. It's literally just an analyst at Bloomberg stating his opinion, without suggesting he has any sources for it at all.

Proof yet again that being a paid "analyst" doesn't mean you actually have to consistently demonstrate a grasp of the market or companies you are "analyzing".

Although I agree with you that $449 would be smart from a market penetration standpoint, Sony doesn't have the capital to comfortably take a $150 loss per console sold. That's a massive loss in the first year.

Price parity makes way more sense and would likely lead to a similar share result. Even that would be leaving money on the table. Sony's mindshare advantage is significant globally. They could charge $600 and still outsell Xbox 1.8:1 everywhere but the US and UK.
 

supernova8

Banned
Proof yet again that being a paid "analyst" doesn't mean you actually have to consistently demonstrate a grasp of the market or companies you are "analyzing".

Although I agree with you that $449 would be smart from a market penetration standpoint, Sony doesn't have the capital to comfortably take a $150 loss per console sold. That's a massive loss in the first year.

Price parity makes way more sense and would likely lead to a similar share result. Even that would be leaving money on the table. Sony's mindshare advantage is significant globally. They could charge $600 and still outsell Xbox 1.8:1 everywhere but the US and UK.


They seem to have about $30 billion cash at hand (cash and cash equivalents that can be converted into cash almost immediately).

Even if they sold 10,000,000 units at a $150 loss per unit, that would only be $1.5 billion loss.

.

Also they make $7 per third party title (platform royalties) for a $60 title, or $27 per title if it's first party because it's their game.


Attach rate around launch for PS4 was about 2.3 games, there were suggestions that having digital options actually increased purchases per user, so if that trend continues with PS5, we could bump that up to 3 games per user.

So if we say each user buys 1 first party ($27) and 2 third party titles ($7 x2), that's $41 and we're down to $109 loss per device. PS+ subscriptions are about $60, if we said that Sony spends half of that (I think it's probably less) to pay for their server costs, that's still $30 to offset so we're down to about $85 loss per device.

If we multiply that by 10,000,000 units in 1 year then we get to $850,000,000 loss ... BUT if you factor in the idea that a lot of those people who buy 3 games at launch will have bought more games by March 2021 (because more games will probably be available) - that attach rate may increase to more like 4 or 5. If you also consider that some people will only buy first party titles, netting Sony more of the profit, you get to a situation where they are losing about $50 per device all said and done.

edit: As/if more people buy the PS5 DE, the numbers move more in Sony's favour because there's no retail taking their cut.

This is only for the initial run and as parts get cheaper, their own manufacturing processes improve, as existing users buy more games and pay for more services, they'll quickly turn a profit.

Anyway what I'm trying to say is... if they really wanted to, they could take much more than a $150 hit per device in the short term.

Sony probably think it's worth taking a loss to get the early victory sealed. I would tend to agree.
 
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truth411

Member
Proof yet again that being a paid "analyst" doesn't mean you actually have to consistently demonstrate a grasp of the market or companies you are "analyzing".

Although I agree with you that $449 would be smart from a market penetration standpoint, Sony doesn't have the capital to comfortably take a $150 loss per console sold. That's a massive loss in the first year.

Price parity makes way more sense and would likely lead to a similar share result. Even that would be leaving money on the table. Sony's mindshare advantage is significant globally. They could charge $600 and still outsell Xbox 1.8:1 everywhere but the US and UK.

Where in the world are y'all getting the Idea that the PS5 BOM is freaking $600 lol. We known for months thats its around $470.
 
Proof yet again that being a paid "analyst" doesn't mean you actually have to consistently demonstrate a grasp of the market or companies you are "analyzing".

Although I agree with you that $449 would be smart from a market penetration standpoint, Sony doesn't have the capital to comfortably take a $150 loss per console sold. That's a massive loss in the first year.

Price parity makes way more sense and would likely lead to a similar share result. Even that would be leaving money on the table. Sony's mindshare advantage is significant globally. They could charge $600 and still outsell Xbox 1.8:1 everywhere but the US and UK.
Well, that analyst estimates that these are the lowest possible prices.

Sony is expected to announce details such as price and release date at the PS5 related video event to be held on the 17th. Masahiro Wakasugi, an analyst at Bloomberg Intelligence, expects the cheapest case to be priced at $ 449 for a model with a disk drive and $ 399 for a model without a disk drive
 

German Hops

GAF's Nicest Lunch Thief
Goddamn need a preorder,they will sell like hotcakes
giphy.gif
 

Aladin

Member
399$ Ps5 DE is such a good value for me. I can play the exclusives I had missed out from the previous generation. And these sell for 15,20$.
 
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