Published: Fri, February 14, 2020
Electronics | By Kelly Massey

Component Shortages Will Push Up PlayStation 5 to "Around $450"

Component Shortages Will Push Up PlayStation 5 to

Scarce components have increased manufacturing costs for PlayStation 5 to around $450 per unit, according to a Bloomberg report citing "people with knowledge of the matter". Sony would wait for the announcement of the price of the Xbox Series X to set the price of its console.

For comparison, the PlayStation 4 retailed for $399 United States dollars and was estimated by IHS Markit to cost $381 USD to manufacture. According to Macquarie Capital analyst Damian Thong the PlayStation 5's retail price would have to be at least $470 if we include a similar gross margin.

Historically, console launch price has proven a delicate topic, as evidenced by the PS3 introductory price of $599, which Sony exec Shawn Layden later described as a "stark moment of hubris" after the record-breaking success of the PS2. Top of the list is very high demand for the DRAM and NAND flash components every PS5 requires.

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 US.

It's not unusual for consoles to be sold at or near a loss, as the games themselves and subscription services more than make up for it.

At one time, this particular unit was owned by the founder, first president, and first chief executive officer of Sony Computer Entertainment, Inc.

Some Sony games staff shared their opinion that the company should sell the PlayStation 5 at a loss if necessary to match the new Xbox.

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So what does that mean if the PlayStation 5 ends up with a $450 unit cost?

Sony has also said that the ongoing coronavirus outbreak has had no impact on PS5 production, unlike the Animal Crossing Nintendo Switch.

With less than a year to go before launch, Sony should have already secured its supply of parts - something which sources confirm, but the only thing that hasn't been settled on is the number of units it'll churn out during the first year.

Bloomberg's report also claims that Sony is planning on releasing a new version of PlayStation VR, which will go on sale at some point after the launch of the PlayStation 5 this Holiday season. According to "people with knowledge of the matter" the console's manufacturing cost is now at around $450 per unit.

Heritage says the console is in full working order and that it has the unique ability to play music while also playing games, a feature that did not come to games consoles into much later in life.

Microsoft is widely expected to hold that information back until the E3 gaming expo in Los Angeles in June. This is despite Sony typically having a retail price locked down by February of a new system's release year.

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