PlayStation 5: Sony could be forced to raise its price up

February 14, 2020

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Shaken by the rise in the price of components, Sony would be in the grip of an internal conflict concerning the pricing of its PlayStation 5. The Japanese manufacturer could renounce the target price of $ 399 / € 399 to avoid a sale at a loss.

While the arrival of the PlayStation 5 in the fall of 2020 is no longer a secret, Sony seems to be having trouble fixing its recommended retail price. According to sources “Close to the case” viewed by Bloomberg, current demand on the electronics market would drive the prices of components retained by Sony upwards, to the point that the manufacturing cost would now greatly exceed the initially targeted sale price of $ 399 (€ 399). Very exactly, the virtual bill would currently be close to $ 450 per console, which would require marketing at a price of more than 470 green tickets to avoid a sale at a loss.

Recall that Sony has already adopted a strategy of selling at a loss for its consoles, this being nothing unusual in the sector. But after the great success of the PlayStation 2, the manufacturer was scalded by its relative failure on the PlayStation 3 generation, which took several years to return to balance. Thus in 2013, he broke with his habits and presented a PlayStation 4 on which he did not lose money at the recommended price of $ 399 (estimated cost of $ 381 / piece), with the success that we know. And the Japanese group hoped to repeat with the PlayStation 5.

Unfortunately for him, that was without counting on the colossal appetite of the electronics market for certain components. Whether on the SSD, RAM, GPU provided by AMD or the cooling system (particularly expensive according to Bloomberg, of the order of several dollars per piece), the prices tend to soar to arrive at the total bill mentioned above. And always according to the sources of Bloomberg, two currents are currently opposed to Sony.

Internal conflict and waiting strategy

On the one hand, the ehealth game branch would rather be in favor of an aggressive positioning, aligned whatever happens on Microsoft's Xbox Series X, also expected at the end of 2020. On the other hand, part of management would be opposed to a possible sale at a loss, favoring a price adjusted to the reality of production costs. Note that Sony has not decided either on the amount of machines to produce for the launch of the console. However, this production will have to kick off in the spring.

For the time being, the Japanese manufacturer is not yet under pressure, even if shareholders, and even its chief financial officer, have demanded transparency in the months to come. They hope that the data will be known in the spring, as has been communicated so far. It remains to be seen whether Sony will be able to wait for Microsoft to reveal its game before adapting its strategy. Unless leaks, the latter should not reveal anything before next June and his conference on the sidelines of the next E3 show.

According to some analysts, positioning the PlayStation 5 at a price higher than that of the PlayStation 4 Pro ($ 399 / € 399) could have a negative effect on demand, even if Microsoft is not much more aggressive.

Note that the sources of Bloomberg also confirmed the arrival of a new PlayStation 5 virtual reality headset in the wake of the PlayStation 5 launch.

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