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Sony Is Struggling With PlayStation 5 Price Due to Costly Parts

ZehDon

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If Sony find themselves in the same position as Microsoft did with the OG Xbone - worse specs at same/higher price - they’ll lose the momentum that carried the PS4.
If Microsoft brings a cheaper console with better specs, a Halo launch title, third party advertising (likely, due to higher specs) at Christmas, Sony is gonna need some pretty major console exclusive games to compete.
 

Kazza

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I wonder if Sony will just decide to cut the amount of DRAM and flash memory, rather than go with a (to them) dangerously high price point?

I feel this is less of a problem for Micorosoft, assuming they go ahead with their lockhart/X strategy. They can keep the Series X specs as originally intended and rise the price if necessary. They will then still have lockheart to fall back on as the economical option (even raising the price by $50, to would likely still be cheaper than PS5, or they could just cut the specs)
 

X-Fighter

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If Sony find themselves in the same position as Microsoft did with the OG Xbone - worse specs at same/higher price - they’ll lose the momentum that carried the PS4.
If Microsoft brings a cheaper console with better specs, a Halo launch title, third party advertising (likely, due to higher specs) at Christmas, Sony is gonna need some pretty major console exclusive games to compete.
Which they won't have. But I don't think PS5 will be more costly and less powerful, wouldn't make much sense.
 

Shin

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I hope that Sony won't go for the cheapest parts
That ship has long sailed, look at Sony as a whole and not only PlayStation.
In the grand scheme of things it doesn't matter and the filthy casuals is what they'll cater to as that's a better plan than catering to a smaller % of hardcore players.
 

Hostile_18

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Feels like as Sony fans weve been in the dark about everything for so long, with them missing trade shows.... this wait and see approach is testing us all.

That been said to suddenly reveal everything at once, with a year and a half of new game announcements they have been "saving up".... well it could potentially be amazing.
 
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Memorabilia

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It's gonna be $499 guys. Not ideal but I'm buying one anyway Day One.

MS is in a financial position to do harm to Sony if they decide to loss lead @ $399 as Sony would be forced to lose a lot per unit to stay on par and let's face it Sony doesn't have the financial resources to weather that storm as well. But I'm not sure MS really even wants to harm Sony at this point. With how the market is shifting MS & Sony are going to potentially be more allies than rivals in the not too distant future. I don't think hurting Sony in this way would be worth the small units sold advantage it might give them. And although it helps the consumer with a lower entry point price it reduces Sony's resources to spend on other improvements to the service and game production.

Both selling at $499 makes the most sense.
 
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bhunachicken

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Personally, I was expecting the PS4 to retail around £449* at launch, which roughly translates to $585.

£449 would be fine for me, to be honest.

(* - a reminder that UK prices include all applicable taxes)
 
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xrnzaaas

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That ship has long sailed, look at Sony as a whole and not only PlayStation.
In the grand scheme of things it doesn't matter and the filthy casuals is what they'll cater to as that's a better plan than catering to a smaller % of hardcore players.
I just wish Sony made a separate model for people with higher expectations. Even the PS4 Pro was poorly built and that's why the early versions had horrible cooling issues.
 
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SuperLupeRap

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"if..."

"but..."

As long as Sony doesn't say anything, people are just reaching and concern trolling.
Oh don't worry, not concerned at all. XSX will def be the 1st console I get because of GP. PS5 probably 2 years down the line when the exclusives get rolling + a price cut.
 

o'dium

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I absolutely believe Sony will be facing an uphill struggle with regard to price, and that certain components will raise this price, meaning that MS could come in and steal the price crown.

However.

This is MS, and they wouldn’t know how to price something effectively if it slapped them in the face. So I fully expect MS to come in and price themselves out, as usual. It wouldn’t shock me to see them be slightly more expensive even... Regardless of power crown.

It’s all rather interesting to watch unfold, regardless. I just wish somebody would, well, unfold something...
 

AV

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I see ol' Mochizuki is back to the "someone told me" game even if he changed outlets. 🤔
Do you have some kind of sixth sense that alerts you every time someone posts an unreliable source?

I'm not complaining, it just seems like you're always the first post in these threads, and within minutes. It's like clockwork.
 

LostDonkey

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There was a "slip" on a Sony website in Japan I believe the other day that showed the PS5 link icon as looking extremely similar in V design to the devkit.

It was removed sharpish. Could have just been a placeholder but If they doubled down on that cooling for the retail unit.
 
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Leshita

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I feel these articles are smart of Sony in helping to keep a positive expectation for the system, while revealing nothing.
This gives the impression that the system is premium and worth whatever price they decide to set it at.
 

bigol

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If Sony find themselves in the same position as Microsoft did with the OG Xbone - worse specs at same/higher price - they’ll lose the momentum that carried the PS4.
If Microsoft brings a cheaper console with better specs, a Halo launch title, third party advertising (likely, due to higher specs) at Christmas, Sony is gonna need some pretty major console exclusive games to compete.
We already know, as Spencer suggested, that Microsoft doesn't plan to have exclusive games on their new console for the first new years, while Sony does. That is enough to convince lots of people to choose Ps5, even if it is at the same price and with slightly worse specs.
 

ZywyPL

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MS is in a financial position to do harm to Sony if they decide to loss lead @ $399 as Sony would be forced to lose a lot per unit to stay on par and let's face it Sony doesn't have the financial resources to weather that storm as well. But I'm not sure MS really even wants to harm Sony at this point. With how the market is shifting MS & Sony are going to potentially be more allies than rivals in the not too distant future. I don't think hurting Sony in this way would be worth the small units sold advantage it might give them. And although it helps the consumer with a lower entry point price it reduces Sony's resources to spend on other improvements to the service and game production.
Times have changed tho. Consoles were almost always sold at a loss, or close to production costs in best case scenario, because despite the fanboys sales wars the consoles are just an investment, a platform to sell what really makes the profit - the games. But now, with PS+ and XBL making billions of dollars every singe year on their own, the manufacturers are even more keen to take a loss than ever before. Just take a look at PS4 -that initial 100$ difference translated in into 100MLN vs 50ML platforms in the long term, and that double userbase numer alone is generating huge profit from the PS+ and software sales, so if Sony really can make the whole PS5 for a mere 450, I can see them dropping the price to their magical 399 and take that 50$ loss - that would one again ensure large userbase in the long run, and would be easily mitigated in the very first year by PS+ subscriptions. But then again, I really doubt PS5 can cost 450$ considering the amount of RAM and SSD it will have, and the supply shortages of the two that are going on for a good couple of years now. I agree that 499$ seems more down to earth.
 

ThaGuy

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$450 would be the highest I pay for a next gen console at this point in time. Anything higher and I'll wait for the next batch and just roll with the current gen for a while.
 

THE:MILKMAN

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I don't put much stock into these BOM guesses to be honest. No way any of them could ever get that close to knowing true prices IMO and certainly not this far from launch.

$399 and $499 are equally likely at this point but only $399/£349 would work with Jim Ryan's stated goal of switch over. Even PS4 at £349 only sold ~250K at the launch weekend in the UK but then took another 4-5 weeks to sell the next 250K.

At £450 to £500 it will sell slow and it will have far more, and tougher, competition this time round.
 

darkinstinct

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Sony spending an unusual amount on the PS5 cooling system tells me the PS5 will also be very powerful :) and the "costly parts" also hints to PS5 having good tech
You spend a lot on cooling because you have to, not because you want to. If PS5 was a well designed system, they wouldn't need an expensive cooling system. Look at XSX. The design cools itself (chimney effect) and requires just a large, cheap, almost silent fan at the top. For a powerful console, because it doesn't run hot. If Sony feels the need to spend a ton on cooling, then their APU is hot. It is only hot if they needed to increase clock speeds. So them requiring a beefy cooling solution puts an end to 48 CU@1.7 GHz or even 54 CU. It means they are indeed using 36 CU@2 GHz.
 
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darkinstinct

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I don't put much stock into these BOM guesses to be honest. No way any of them could ever get that close to knowing true prices IMO and certainly not this far from launch.

$399 and $499 are equally likely at this point but only $399/£349 would work with Jim Ryan's stated goal of switch over. Even PS4 at £349 only sold ~250K at the launch weekend in the UK but then took another 4-5 weeks to sell the next 250K.

At £450 to £500 it will sell slow and it will have far more, and tougher, competition this time round.
The numbers are readily available. OEM prices aren't a trade secret, you can look them up. The only unknown factors are how big the APU will end up being (that changes cost between $100 for 350mm^2 and $120 for 400 mm^2), what the exact amount of RAM above 16 GB is and if they are using 500 GB SSDs or 1 TB. It is not rocket science to guess BOMs. Most of it is using bog standard parts because those are cheaper.
 

THE:MILKMAN

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The numbers are readily available. OEM prices aren't a trade secret, you can look them up. The only unknown factors are how big the APU will end up being (that changes cost between $100 for 350mm^2 and $120 for 400 mm^2), what the exact amount of RAM above 16 GB is and if they are using 500 GB SSDs or 1 TB. It is not rocket science to guess BOMs. Most of it is using bog standard parts because those are cheaper.
Knowing the OEM part prices isn't really the issue. The issue is at what price (in the millions a month) are Sony/MS paying for the various parts?

I would like to see a breakdown of these $450 BOMs. We don't know many of the details of what make up these consoles yet so how can they possibly be that accurate?
 

Shin

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I just wish Sony made a separate model for people with higher expectations. Even the PS4 Pro was poorly built and that's why the early versions had horrible cooling issues.
Those days might have died when Kutaragi left Sony, I'm personally hoping for a 12TF machine at $500.
Also in typical fashion the degenerate defense force is present, because heaven's forbid we as consumers criticize a company where and when warranted, whoever that company may be.
 

siekro1983

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I think i might go back to xbox till ps5 pro comes i just don't have a good feeling, the smell of shit is in the air.
 

X-Fighter

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This is MS, and they wouldn’t know how to price something effectively if it slapped them in the face. So I fully expect MS to come in and price themselves out, as usual. It wouldn’t shock me to see them be slightly more expensive even... Regardless of power crown.
This has been so true. I even found it very odd that the OneX was 499EUR, I really expected it to be 399 to be competitive, but they didn't really seem to care. Even if the PS5 is more expensive to make, I can easily see them costing the same. Microsoft doesn't seem to dare to take a risk on console pricing, even though they are shifting more and more to a services business model.
 

Orta

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Can't see it coming in at under 500 myself. Whatever the eventual cost it'll be pretty high once you add a game and another extra (controller, online sub) into the equation.

Outside the US it'll be a pisstake though, we all know $500 will mean £500 GBP and based on past experiences Europeans will get really fucked over to the tune of around €540.

Of course maybe Sony might sell it at 150 notes for their love and respect of their customers....

Just wait and see I suppose.
 
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darkinstinct

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Knowing the OEM part prices isn't really the issue. The issue is at what price (in the millions a month) are Sony/MS paying for the various parts?

I would like to see a breakdown of these $450 BOMs. We don't know many of the details of what make up these consoles yet so how can they possibly be that accurate?
We don't need to know the exact prices (discounts for these parts are in the 2 to 3 % range anyway, there is no massive discount because of the overall high demand) because we just need to compare them to previous BOM teardowns that also didn't know the exact prices but went with OEM pricing. So going by that as the baseline you only need to add higher cost for the UHD drive, for more RAM and for the SSD. NAND prices have gone up because of some issues at Samsung, who are one of only three suppliers in the world. They are expected to rise more this year because of demand. RAM prices suffer from continued high demand for DRAM from mobile phones. HBM2 would be even more expensive, though. And then there is the controller, which will definitely cost more to make if they go to vibration triggers and resistance locks. If Sony puts USB-C ports into PS5 that's another couple of bucks more expensive than the USB-A ports in XSX.
 
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darkinstinct

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This has been so true. I even found it very odd that the OneX was 499EUR, I really expected it to be 399 to be competitive, but they didn't really seem to care. Even if the PS5 is more expensive to make, I can easily see them costing the same. Microsoft doesn't seem to dare to take a risk on console pricing, even though they are shifting more and more to a services business model.
I think Spencer is required to not lose money overall, that's what keeps Xbox running. Minecraft is still bringing in 300 to 400 million in profits each year (game sales, microtransactions, merchandise), he uses that to fund Game Pass and potentially hardware. Kind of like how Epic is using Fortnite money to build their store.
 

Sussoloc

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This has been so true. I even found it very odd that the OneX was 499EUR, I really expected it to be 399 to be competitive, but they didn't really seem to care. Even if the PS5 is more expensive to make, I can easily see them costing the same. Microsoft doesn't seem to dare to take a risk on console pricing, even though they are shifting more and more to a services business model.
The gen was already lost early 2014. The X/all digital and its pricing were tests. They wanted to see how many people buy niche stuff at a certain price. Lowball offers wouldn't have given them useful information.
 
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X-Fighter

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I think Spencer is required to not lose money overall, that's what keeps Xbox running. Minecraft is still bringing in 300 to 400 million in profits each year (game sales, microtransactions, merchandise), he uses that to fund Game Pass and potentially hardware. Kind of like how Epic is using Fortnite money to build their store.
All the money goes into one big pot, but I always thought they are using XBL money to fund Game Pass. It never really made sense to charge for those online services, except that it needs to be maintained and developed a bit, but still it's a lot of money for something PC provides out of the box. So giving these deals of $1 to "upgrade" your XBL account, in my opinion is more that you are buying XBL for $1 and the rest is paying for Game Pass. Pretty sure they are going to bundle this in the future anyway.
 

M1chl

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Whatever it cost, I don't want another shitty build loud console, it's embarassing and this shit has no place in consumer electronic which you throw in your living room, that goes for every manufactuer. Even on my PC I spent a shitton of money, just to make it near silent machine.

Yo what, that's not E3?!
 
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Sussoloc

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Whatever it cost, I don't want another shitty build loud console, it's embarassing and this shit has no place in consumer electronic which you throw in your living room, that goes for every manufactuer. Even on my PC I spent a shitton of money, just to make it near silent machine.


Yo what, that's not E3?!
I used to spend much money too. But then i placed my Tv next to a boxroom and drilled a little hole in the wall for the cables. Even the hair dryer / vacuum cleaner PS4 ist silent now and my Pc has the cheapest and loudest stuff i could find :)
 
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Woo-Fu

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I read nothing in that article that backs up the initial premise. I also read nothing in that article that makes it obvious that this isn't how every generation of hardware is approached.

The author wanted a sensationalist headline but failed to back it up with anything resembling relevant facts.
 
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