First released during the holiday season in 2013, the PS4 was an instant hit and is still going strong today. But, it is about time for a generational update.
The PS5 will be launched during the holiday season later this year together with its competitor, the Xbox Series X. But it seems like it has not been smooth sailing for Sony as they are reportedly struggling to keep the next-gen console’s cost down.
Difficult decison on pricing the PS5
According to a report by Bloomberg, Sony is reportedly struggling to keep the PS5’s cost down, forcing a hard decision on its eventual retail price. The reported manufacturing cost of the PS5 is at $450 per unit. That’s approximately RM1,865 to just manufacture 1 unit of the PS5!
This has delayed Sony’s decision on the pricing of the PS5 which will be finalized in February, followed by mass production in the spring. According to a source of Bloomberg, Sony is taking a wait-and-see approach. What this means is they are waiting to see how its main competitor, Microsoft, prices the Xbox Series X.
As a comparison, the PS4 was launched in 2013 with a price tag of $399 (RM1,652) and was estimated to cost $381 (RM1,578) to manufacture. With a similar margin on the reported $450 cost price, the PS5’s retail price should be at least $470. That sums up to approximately RM1,950!
Why is the PS5 so expensive to manufacture?
The main reason for the snowballing costs, according to Bloomberg, is the supply of DRAM and NAND flash memory. As smartphone makers are gearing up for the latest generation of devices, including the newly-launched Galaxy S20, the high demand for DRAM and NAND flash memory is driving the costs higher than expected.
In a statement by Sony’s Chief Financial Officer Hiroki Totoki at an earnings briefing earlier this month, he said,
“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.”
This has placed Sony in a difficult position. As the pricing of the PS5 might be an upwards of $100 more expensive than its predecessor at launch, it is hard to predict how the market will react.
Are you excited for the PS5?
The PlayStation 5 and the Xbox Series X are planned to be launched during the holiday season this year. How do you think both of these next-generation consoles will be priced?
Which one are you more excited about, the PlayStation 5 or the Xbox Series X? Or are you a bangsawan that is planning to purchase both anyway?