PS5 Price Poll Closed! $500 & $400!

[DoctorEncore | 3,690]

Now that we (finally) have some next gen prices from Microsoft, let's make some wildly baseless predictions on the cost of the PS5! For those who missed it, the beefy Xbox Series X will drop at $499 and the small, yet mighty Series S will land at $299. We haven't seen any reports on manufacturing costs for the X, but I can't imagine Microsoft is making any money on the consoles at those prices given the crazy specs. In fact, many people actually thought the MSRP could be as high as $600. I suspect they are selling at the break even cost for each of these, but it's also possible that Microsoft may be subsidizing the red ink through the rest of their business empire or through future projected revenue from subscription services (Game Pass, Live, etc). Regardless, I think both of these consoles are aggressively priced and the ball is firmly in Sony's court.

Not too long ago, it was revealed that Sony was struggling with component availability and build costs, in large part due to their lightning fast SSD. Estimated manufacturing cost is around $450, although we don't know if that is for the full fat PS5 or the discless version. The console space has changed a lot in the last ten years and no company wants to lose money on hardware sales (although this had been the strategy in many previous generations). While the Playstation brand is hugely successful and a very dependable money maker, Sony is not the trillion dollar behemoth Microsoft has become over the last five years. It takes a LOT of traditional games sales (AKA a very high attach rate) to make up for a $50 loss on hardware. As we approach the end of the PS4's lifespan, the attach rate is around 10. With licensing fees hovering around 10% of sales price, Sony only brings in $6 per sale of a third party game that costs $60. Do the math and that's a total of $60 revenue for all ten copies of Madden purchased by a casual PS4 sports fan (10% x $60 x 10). The numbers get worse if those games cost less than $60 and better if they are first party games (70-95% to Sony?) or third party PSN digital sales (~30% to Sony). When you consider those numbers, a $50 loss on a console is actually pretty daunting, even when you attempt to subsidize it over the lifespan of a console. 

So we've established that it doesn't make much sense for Sony to take a loss on selling standard consoles, but the all-digital console and our looming all-digital future make this a more difficult math problem. Things are changing on the retail landscape and more than half of all games sales are now digital. Every game sold for the discless console will be digital while 60% or more of the copies sold for the regular console will also be digital. Sony could net a much more palatable $18 (~30% of $60) per third party sale due to the favorable economics of the Playstation Store.

So where does this leave us? I predict Sony will sell each console at the break even cost (factoring in logistics, retail partners, etc).

PS5 All-Digital: $450

PS5: $500

Thoughts?

Edited September 18, 2020 by DoctorEncore

[Aguy | 771]

I think Sony is going to steal some of the current XSX thunder by announcing price, release date, AND open preorders next week, right before XSX preorders open on the 22nd. 

[scaryice | 581]

At this point, anything other than 500/400 would be a surprise to me. I feel very confident the disc version will be 500, anyway, to match the XSX. I'm sure Sony wants people to go digital, so 100 less seems like a good bet. I'm not sure 50 less is enough of a discount. Also, it's weird to see a console launch price end in 50.

I wouldn't expect it to be more expensive than that, but there's an outside chance it could be cheaper if they really wanted to crush Microsoft and lose some money in the process.

[TDIRunner | 2,725]

I'm sure it will be priced right in line with the Microsoft numbers.  Anything more or less would be a surprise to me.  It doesn't matter much to me as I am very rarely an early adopter with this type of stuff.  I usually wait several years before getting new consoles. 

 

Of course, the fact that I don't have a working HD TV, let alone a 4K TV is another reason to wait.  

[DoctorEncore | 3,690]

1 hour ago, scaryice said:

At this point, anything other than 500/400 would be a surprise to me. I feel very confident the disc version will be 500, anyway, to match the XSX. I'm sure Sony wants people to go digital, so 100 less seems like a good bet. I'm not sure 50 less is enough of a discount. Also, it's weird to see a console launch price end in 50.

I wouldn't expect it to be more expensive than that, but there's an outside chance it could be cheaper if they really wanted to crush Microsoft and lose some money in the process.

 

48 minutes ago, TDIRunner said:

I'm sure it will be priced right in line with the Microsoft numbers.  Anything more or less would be a surprise to me.  It doesn't matter much to me as I am very rarely an early adopter with this type of stuff.  I usually wait several years before getting new consoles. 

 

Of course, the fact that I don't have a working HD TV, let alone a 4K TV is another reason to wait.  

I honestly believe that Sony wanted to release at $600, but they knew MS probably wouldn't make the same mistake two generations in a row. I think Microsoft's aggressive pricing probably saved us all a lot of money. I have a hard time seeing the Digital PS5 selling for $400 since the standard console is barely breaking even at $500. Removing the disc drive only saves $20-$30, so that's a lot of red ink, even when all purchases will be digital.

I actually would prefer to buy the digital PS5, but I have a bunch of PS4 games I never played that I've been saving for the PS5. If they don't announce some kind of digital upgrade program soon, then I guess I'll have to take a hit to the wallet and get the standard console.

[Gloves | 11,761]

45 minutes ago, ChickenTendas said:

Does anyone know how the backwards compatibility will work for physical games on the digital-only model?

Not at all, obviously.

[DoctorEncore | 3,690]

2 hours ago, ChickenTendas said:

Does anyone know how the backwards compatibility will work for physical games on the digital-only model?

 

1 hour ago, Gloves said:

Not at all, obviously.

Do you guys think this is another game of chicken? I find it hard to believe that MS does not have some kind of plan for digital license transfers given their aggressive marketing of backward compatibility. It also seems like they're going to push the Series S hard, even for hardcore gamers.

I'm sure Sony has something in mind, but maybe they want to see what Microsoft is planning so they can match it? Sony is in such a dominant position right now, they really don't have to go above and beyond in any capacity. They just have to match MS and they will sell more consoles, or at least more expensive consoles; I think the Series S will actually do remarkably well.

[Bearcat-Doug | 5,104]

I went $400/$500. Anything above $500 might struggle to sell in the current environment. 

 

[Hammerfestus | 3,820]

I had no opinion on this but you lured me in with poll.  
I think they’ll do everything in their power to avoid breaking the $500 mark.  Regardless of actual value, I think above that threshold sticker shock starts to set in for most people.

[DoctorEncore | 3,690]

2 hours ago, Bearcat-Doug said:

I went $400/$500. Anything above $500 might struggle to sell in the current environment. 

 

 

1 hour ago, Hammerfestus said:

I had no opinion on this but you lured me in with poll.  
I think they’ll do everything in their power to avoid breaking the $500 mark.  Regardless of actual value, I think above that threshold sticker shock starts to set in for most people.

Muahaha... The allure of the poll never fails.

I agree that $500 makes the most sense from a marketing perspective, especially with the Series X looking very attractive at the same price.

That being said, the system would still be a solid value at $600 and the first 6 months of shipments would absolutely sell out. After that initial demand wavers, they'd be left in the VERY unenviable situation of considering an early price cut which would increase demand, but incense early adopters.

It seems like nearly every one agrees with $500/$400 as of now. I'm sticking with $450 for the digital edition because I don't see any reason for Sony to leave that $50 on the table. In my opinion, the PS5 Digital Edition is competing with the Series X and  standard PS5. The Series S is really in it's own category and I don't think a $400 PS5 will sway anyone away from it. Additionally, the digital version will sell out for at least 6 months and, if it doesn't, a $50 price cut for the digital version only is much more palatable from a consumer perspective.

Anyways, Sony has a PS5 event scheduled for this Wednesday. It sounds like yet another games event, but they have to announce price and release date there, right? Right?

[DoctorEncore | 3,690]

One final bump and last call for the poll. It seems very likely that the price will be revealed some time tomorrow during the PS5 Showcase which starts at 4pm EST. There is a chance preorders could open at that time as well, so it's probably worth it to set an alarm if you're interested.

[Hammerfestus | 3,820]

I saw an article today about some Spanish retailer may have had them in their system at 499 & 399.

[JamesRobot | 5,786]

That RTX 3070 is looking pretty good.  Might have to make the jump to PC this go round. 

[ZeldaFreak | 3,600]

11 minutes ago, JamesRobot said:

That RTX 3070 is looking pretty good.  Might have to make the jump to PC this go round. 

ᴼⁿᵉ ᵒᶠ ᵘˢᵎ One of us! One of us! ONE OF US! ONE OF US! ONE OF US!!!

Hahaha, in all seriousness, now definitely would be a good time to jump in to PC gaming if you want to, it's definitely a very exciting time. With the very impressive 30 series cards coming out, as well as whatever AMD has cooking with both upcoming CPUs and GPUs, along with stuff like DDR5 memory being on the horizon, plus some of the previously PS4 exclusive games coming over to PC... I'm definitely thinking this is going to be the generation that I'll have my first major PC upgrade, personally. First built my PC back in early 2016, just before the 10 series cards came out.

Sorry, not to derail the thread, I know this is all about consoles, haha, I'm just saying that while I think everyone would agree 2020 has been a pretty bottom of the barrel year overall, at least towards the end of it we're getting the silver lining that it's definitely looking like these are some exciting times for tech in general, what with the new consoles coming out, as well as tons of impressive PC hardware coming out, and plenty of rumors of a Switch Pro. It's a win-win scenario for all of us, whether you're a console or PC gamer

[ZeldaFreak | 3,600]

Also, small side-note that while it looks like I forgot to vote in this poll, $500 and $400 respectively is also pretty much exactly what I was expecting. Still very surprised with the Series S pricing though, that's pretty wild. Definitely showing that Microsoft is trying very hard not to lose this generation, given how much of an ass-whooping Sony gave them last gen.

[JamesRobot | 5,786]

1 hour ago, ZeldaFreak said:

ᴼⁿᵉ ᵒᶠ ᵘˢᵎ One of us! One of us! ONE OF US! ONE OF US! ONE OF US!!!

Gooble gobble 

[DoctorEncore | 3,690]

$500 and $400 it is! The community pretty much nailed it.

Now that we've got the prices and started preorders, I'm a bit shocked by how low Sony went for the Digital Edition. I really think they left some serious cash on the table. Also, based on Gamestop preorder quantities and how fast the Digital Edition sold out, it seems like only 10-20% of the initial production run was the discless console. That's surprising considering how much money they make on digital sales and the fact that digital sales are making up more than 60% of all games sales now.