Sony is struggling to finalize a price for PS5 due to high production cost.

 a wireless dualshock PlayStation Controller
Photo by Pawel Kadysz on Unsplash


Sony's PlayStation 5 is due to release this year during the holiday season, but the people at Sony are finding it hard to come up with a price tag for the new PlayStation, reported by Bloomberg, Sony used some high-cost parts in PS5 to make it perform at it's best, but the sum of the cost for using those costly parts added up to $450, according to the insiders.

The competition for Sony's PlayStation 5 comes in the form of Microsoft's Xbox series X, which was also due to release this year, wrong pricing may let the customers think twice before buying PS5, which may turn out into a benefit for Xbox series X, Sony sold it's last PlayStation, PS4 for $399, which cost $370 to manufacture, If Sony wants to make similar profit from PS5 they have to sell it for $470.

According to Bloomberg, Sony may want to wait until Microsoft reveals the price for Xbox series X at E3 conference, Macquarie Capital analyst Damian Thong "Consumers will benchmark their expectations based on the PS4 Pro and PS4, If Sony prices above that, it would likely be to balance a need to offset higher materials cost, against risk to demand."

Bloomberg notes that Videogame companies often sell their hardware products at a low price even though it may result in a loss for them to capitalize on the game software and subscription services. Sony’s Chief Financial Officer Hiroki Totoki said at an earnings briefing  that "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 finalized Most of the PS5 components like the cooling system which costs a few dollars per unit which is expensive as other companies only spend less than a dollar for a cooling system, but Sony wants to make sure that powerful chips in PS5 won't get baked inside, Sony usually makes a decision on price of a PlayStation product in February and goes into production in Spring.

So far, the plans for PS5's production were not impacted by the coronavirus, Sony has plans to release a new PlayStation VR virtual-reality headset, scheduled to release after the PlayStation 5 sales begin.



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