PlayStation 5 will be noticeably more expensive than PS4. Will you pay over PLN 2,000 for the Sony console?

The production cost of one PlayStation 5 console is about $ 450. Assuming this value as a starting point, Sony cannot sell PS5 below PLN 2,000 a piece, unless it wants to contribute to its own interest.

Based on a Bloomberg report , Sony is trying to close the cost of producing PlayStation 5 to $ 450. For comparison, the cost of producing PlayStation 4 during the release period was around $ 380. From the beginning, Sony sold the PS4 at a profit, while maintaining the attractive, competitive price of its gaming platform. It won't be that easy with a new machine.

In order not to add business, Sony must sell PlayStation 5 for a minimum of PLN 2,000.

This PLN 2,000 is derived not by the dollar but by the euro. Sony policy equals American and European currency, to the disadvantage of Polish players. However, it is likely that the final price of the PS5 will be even higher. Console manufacturers want not only to cover production costs, but also to earn on each sold product. Therefore, a price between PLN 2,999 and 2,499 seems more likely to me. At least for the premiere planned for the end of 2020.

Probably over time, the price of PS5 will peak, stopping at a symbolic amount of PLN 1999 per box. At the same time, the production process is optimized and the cost of components will be systematically reduced. In this way, Sony will still earn on each copy sold, maintaining a competitive price below two thousand zlotys.

It seems unlikely that Sony would sell PS5 below cost.

Today, the dominant model on the gaming platform market is the one chosen by Sony and Nintendo: we earn not only on software but also on hardware. Hence the very high margin on accessories, as well as the price of consoles set at this level, so that each copy is sold at a profit to the company. This profit will be crucial especially in the new era of consoles due to widespread backward compatibility.

Both PS5 and Xbox Series X will support previous generation video games. And if PlayStation 5 owners get the option to import the collection from PS4, it will dramatically affect the sale of new titles. In the initial period of existence of the new generation consoles, sales of games may be noticeably lower, due to the longevity of the current collection. And Sony, Microsoft or Nintendo want to earn. That is why I expect an even greater pressure on profits related to the direct sale of hardware than before.

Of course, it is not said that backward compatibility will be completely free. We may have to pay a small fee to transfer the title from PS4 to PS5. Even so, this type of sum cannot be too great. Backward compatibility is the key - next to the price and exclusive catalog - a determinant of success or failure. If Sony does it wrong, if it turns out to be greedy, it may lose a new deal in favor of Microsoft and Xbox Series X.

Price is not the only Sony dilemma. The second is the availability of components.

In the same Bloomberg report we can read that the challenge for Sony and Chinese factories will be securing the appropriate NAND and DRAM memory resources. All because of the extremely high demand for this type of elements among smartphone manufacturers. The secret of the polyszynela is also that some Chinese factories were closed due to the outbreak of the coronavirus. It also does not help in the implementation of a multi-million order for an advanced platform with the desired components.

The example of Xbox One in turn proved that securing the right number of consoles to start is crucial. Microsoft was not able to carry out the global premiere of XONE in all leading markets, thus giving the field to a rival. A difference of power arose that Xbox could never make up for. Sony dug in comfortable positions, quickly stepping into the position of console leader. The Japanese would certainly like to repeat this maneuver.

PlayStation 5 will be noticeably more expensive than PS4. Will you pay over PLN 2,000 for the Sony console?