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Sony Is Struggling With PlayStation 5 Price Due to Costly Parts


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 3 days ago '09        #1
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Tiko377 
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Sony Is Struggling With PlayStation 5 Price Due to Costly Parts
 

 
Scarce components have pushed the manufacturing costs for Sony Corp.’s next PlayStation to around $450 per unit, forcing a difficult price-setting decision in its battle with Microsoft Corp., according to people with knowledge of the matter.

The Japanese conglomerate is preparing to gradually replace the six-year-old PS4 console, releasing its PlayStation 5 the same holiday season its archrival debuts the upcoming Xbox Series X. Sony typically finalizes a console’s price in February of the release year, followed by mass production in the spring. With the PS5, the company is taking a wait-and-see approach, said the people, asking not to be named because the details are private.


The PS4, released in 2013 at a retail price of $399, was estimated by IHS Markit to cost $381 to manufacture. With the $450 unit cost and a similar gross margin, the PlayStation 5’s retail price would have to be at least $470. That would be a hard sell to consumers, considering Sony’s most expensive machine now is the $399.99 PS4 Pro and is often discounted, according to Macquarie Capital analyst Damian Thong.

“Consumers will benchmark their expectations based on the PS4 Pro and PS4,” Thong said. “If Sony prices above that, it would likely be to balance a need to offset higher materials cost, against risk to demand.”

Sony declined to comment.

The company’s biggest headache is ensuring a reliable supply of DRAM and NAND flash memory, with both in high demand as smartphone makers gear up for fifth-generation devices, according to people familiar with Sony’s operations. Samsung Electronics Co. just announced its Galaxy S20 product range, each variant of which will have 5G and a minimum of 12GB of RAM in the U.S.

Videogame companies often sell hardware at thin margins or even at a loss because they profit from lucrative game software and recurring online subscription services. Sony’s Chief Executive Officer Kenichiro Yoshida has said the business should be judged by the number of active users, not the number of hardware units sold. Some Sony games staff think it should sell the new console at a loss if necessary to match Microsoft’s price, while other Sony executives would prefer to make money as the company did with the PS4.

“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,” Sony’s Chief Financial Officer Hiroki Totoki said at an earnings briefing earlier this month.

Most of the components for the console have been locked down, the people said, including the cooling system, which is unusually expensive at a few dollars per unit. Typically, companies would spend less than a dollar, but Sony opted to lavish more on making sure heat dissipation from the powerful chips housed inside the console isn’t an issue.

The ongoing coronavirus outbreak has had no impact so far on preparations for PlayStation 5 production, they said. The company has yet to decided how many PlayStation 5 units it will make in the first year, they added.

Separately, Sony plans to release a new version of the PlayStation VR virtual-reality headset, tentatively scheduled after the PlayStation 5 goes on sale, the people said.

Sony has already canceled some previously planned features for a new mirrorless camera due this year owing to the constrained DRAM supply, several people with knowledge of the matter said.

Sony executives are voicing patience about the next console’s pricing as they anticipate the transition to be a gradual one, said people familiar with its day-to-day operations. Many of the games launched for the PlayStation 5 will also be available to play on the predecessor machine, so revenue from software and related network services is expected to keep the business performance intact. Microsoft and Sony are both expanding their respective online subscription services, revenue from which may allow them greater flexibility on hardware pricing.

People within the PlayStation business unit said a key factor in deciding the ultimate PlayStation 5 retail price will be where Microsoft sets its price for the next-generation Xbox Series X. Microsoft is widely expected to hold that information back until the E3 gaming expo in Los Angeles in June.

There is pressure from CFO Totoki for Sony to provide more transparency and information in the buildup to the PS5’s release, which has caused some consternation internally. Asked about when he expects Sony to provide guidance on the gaming business outlook for the new fiscal year, Totoki said the plan is no different from the recent past, meaning the guidance can be expected around the end of April.

If the company takes longer than usual, analysts may look to its next investor relations meeting to glean hints about the new console’s retail price. The company held that meeting in late May last year.

visit this link https://www.bloomberg.com .. o-costly-parts
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46 comments
 

 3 days ago '16        #2
stop it 5 
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Fake news

Sony ain’t said a word about ps5 to anyone that isn’t on the need to know list

This article is just speculation
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 3 days ago '17        #3
justin747  topics gone triple plat - Number 1 spot x1
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Sony declined to comment.


Not buying any of this sh*t until I hear the official word

 2 days ago '12        #4
BrooklynSwag 
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Microsoft tired of these Japanese hoes doing the whole “lets see what they do first then counter” sh*t.

Phil n em should just price the series X at 399$ for sh*ts n giggles

Microsoft financially can take the hit on hardware loss, they got XCloud coming which going to have everybody playing they’re games wherever at anytime

Sony scared right now, Sony sheep on Neogaf (SonyGaf) scared

Microsoft got they foot on n*ggas necks this gen.


Last edited by BrooklynSwag; 02-14-2020 at 01:26 PM..
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 2 days ago '18        #5
Dehone 
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"299"

*roaring applause*
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 2 days ago '17        #6
Rule 336  topics gone triple plat - Number 1 spot x5
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 BrooklynSwag said
Microsoft tired of these Japanese hoes doing the whole “lets see what they do first then counter” sh*t.

Phil n em should just price the series X at 399$ for sh*ts n giggles

Microsoft financially can take the hit on hardware loss, they got XCloud coming which going to have everybody playing they’re games wherever at anytime

Sony scared right now, Sony sheep on Neogaf (SonyGaf) scared

Microsoft got they foot on n*ggas necks this gen.
How they got they foot on anyone's neck when the last console barely outselling the switch.
+14   

 2 days ago '18        #7
yunhsus  topics gone triple plat - Number 1 spot x3
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sportsbook top 10
 Dehone said



"299"

*roaring applause*
fk no, ps5 is going to be no less than 40

 2 days ago '05        #8
HARBINGER 
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everybody know Sony ain't sh*t
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 2 days ago '11        #9
CALViiiN  topics gone triple plat - Number 1 spot x4
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 BrooklynSwag said
Microsoft tired of these Japanese hoes doing the whole “lets see what they do first then counter” sh*t.

Phil n em should just price the series X at 399$ for sh*ts n giggles

Microsoft financially can take the hit on hardware loss, they got XCloud coming which going to have everybody playing they’re games wherever at anytime

Sony scared right now, Sony sheep on Neogaf (SonyGaf) scared

Microsoft got they foot on n*ggas necks this gen.
 Rule 336 said
How they got they foot on anyone's neck when the last console barely outselling the switch.



@
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 2 days ago '18        #10
KdenIII 
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I don't give a sh*t about an extra 1-200 for a device that is gonna last 6-7 years.

I always said I wished they'd make it more powerful and out the price range of most kid's parents so I don't gotta hear how some 13 year old fu*ked my mom every time I play cod.
+27   

 2 days ago '12        #11
BrooklynSwag 
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 Rule 336 said
How they got they foot on anyone's neck when the last console barely outselling the switch.
Sony scared to drop any type of info/Price

All they gave was the logo reading forums like SonyGaf mfers shriveling up over the no info sh*t.

And honestly Microsoft moved on from Hardware, as they should. The console literally only sells well in North America. This whole xCloud thing really about to take off, playing games anywhere, anytime, on any device (minus PlayStation)

This time 6 years ago, Sony had sh*t ready to drop.
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 2 days ago '05        #12
WCIB 
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 2 days ago '17        #13
Cant Read Sh1t 
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 BrooklynSwag said
Microsoft tired of these Japanese hoes doing the whole “lets see what they do first then counter” sh*t.

Phil n em should just price the series X at 399$ for sh*ts n giggles

Microsoft financially can take the hit on hardware loss, they got XCloud coming which going to have everybody playing they’re games wherever at anytime

Sony scared right now, Sony sheep on Neogaf (SonyGaf) scared

Microsoft got they foot on n*ggas necks this gen.

xbox gotta worry about outselling the soulja console 2 before putting their foot on anybody's neck
+11   

 2 days ago '05        #14
Sub Crazy 
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I don’t buy consoles at launch.

GTA has to come out for me to give a sh*t. But Spider-Man 2 for ps5 will make me bite the bullet.

I knew ps5 was coming. I got $1200 put to the side just for that sh*t. I’m still going to wait though so I can buy as many accessories and games as I need.
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 2 days ago '18        #15
Sparty89 
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As long as we’ve known PS5 was coming out, if a MF doesn’t have at-least $600 to blow, then they don’t need one!!!!!!! Take that broke sh*t over to microsoft!!!!
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 2 days ago '16        #16
TrillPeez 
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Just make it $499 Sony n*ggas got bread
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 2 days ago '12        #17
BrooklynSwag 
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 Cant Read Sh1t said
xbox gotta worry about outselling the soulja console 2 before putting their foot on anybody's neck
Can’t lie I missed coming to the gaming section for your dumbass responses

fag**t




















YOUNG!
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 2 days ago '15        #18
Ruger707 
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I’m copping whatever the cost is
PlayStation nation
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 2 days ago '05        #19
Daddy Black 
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That sh*t gonna be expensive. When PS4 was about to drop they came out hard af specs, price , release date, mic drop. With that said I’m prob gonna wait till the redesign or upgraded model because ps4 gonna go for another 3-4 years easily. 2022-2023 gonna be the best time to cop ps5
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 2 days ago '16        #20
NYNY 
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 BrooklynSwag said
Microsoft tired of these Japanese hoes doing the whole “lets see what they do first then counter” sh*t.

Phil n em should just price the series X at 399$ for sh*ts n giggles

Microsoft financially can take the hit on hardware loss, they got XCloud coming which going to have everybody playing they’re games wherever at anytime

Sony scared right now, Sony sheep on Neogaf (SonyGaf) scared

Microsoft got they foot on n*ggas necks this gen.
PlayStation been outselling Xbox since forever they got those n*ggas beat all ends up I guarantee you ps5 will outsell whatever sh*t Xbox releases
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Top 10 most slapped recently  2 days ago '05        #21
TonyCartagena 
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 CALViiiN said



@
LBox One L Sold Barely 50 Mill While The 360 Sold Almost 90 Mill
Thats A Failed Generation If You Ask Me Meanwhile Ps4 Coming For Ps2s Total All Time
Ps5 Bout To Pass Both
 Cant Read Sh1t said
xbox gotta worry about outselling the soulja console 2 before putting their foot on anybody's neck
Soulja Console 2

 2 days ago '06        #22
lato9905 
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Microsoft is used to the Xbox division losing money. 399 fk it while the PS5 is 599
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 2 days ago '04        #23
dog4life 
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I am copping regardless
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 2 days ago '16        #24
96jordan 
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 Sub Crazy said
I don’t buy consoles at launch.

GTA has to come out for me to give a sh*t. But Spider-Man 2 for ps5 will make me bite the bullet.

I knew ps5 was coming. I got $1200 put to the side just for that sh*t. I’m still going to wait though so I can buy as many accessories and games as I need.
Consoles at launch got the most features before they start stripping away to cut price . You missing out
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 2 days ago '14        #25
DavidAames 
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 Ruger707 said
I’m copping whatever the cost is
PlayStation nation
Big Facts!
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