The PlayStation 5 production cost apparently just went up for Sony Interactive Entertainment. According to internal sources from Bloomberg, the cost of producing one PS5 unit has risen to 450$.
The production cost is certainly going to make the PlayStation 5 pricing decision, very hard for Sony. As we know that the PlayStation 5 price is still not decided yet. It looks like production cost is one of the bigger reasons due to which Sony has not been able to determine the PlayStation 5 price. Of course, waiting for Microsoft to announce the Xbox Series X price also seems logical.
Sony seems to be taking a wait-and-see approach with the PlayStation 5. Usually, the company announces its console price in February and mass production of that console begins in spring. The retail price of the PlayStation 4 was $399 and its cost of manufacture was $381. If we go by this standard then the PlayStation 5 price should be around $470.
Spending $470 dollars on a console just seems excessive even for this day and age. The most expensive console from Sony at the moment is the PS4 Pro which costs $399. That is a $70 dollar difference at the minimum. Making a generational leap in the console department has never had this much of a discrepancy in cost.
Right now Sony’s biggest concern is supplying NAND flash memory and DRAM, reliably. The demand has increased due to the launch of a next generation of smartphones. It should be pointed out that consoles are usually sold at a loss in the beginning by video game companies. They get their profits from online subscription services. Maintaining a high number of active users is the top priority upon release.
Looks like Sony is in a rough spot right now. Revenue from game software and online services should provide a cushion for the company if things go side-ways. The launch event for the PlayStation 5 is rumored to take place in March. If that turns out to be the case, we could very well have the price point for PlayStation 5.