PlayStation 5 Manufacturing Costs Reportedly at 'Around $450 Per Unit'

Bloomberg: PS5 manufacturing costs pushed to $450 per unit, Sony facing pricing difficulty due to competition and scarce parts

PlayStation 5 Manufacturing Costs Reportedly at 'Around $450 Per Unit'

At XO19 previous year, head of Xbox Phil Spencer remarked, "I would say a learning from the Xbox One generation is we will not be out of position on power or price", suggesting the company has thought long and hard about this topic.

According to Bloomberg, "people with knowledge of the matter" claim that each PlayStation 5 unit will cost $450 to produce.

More than a decade ago, Sony released the PS3 with a whopping $499.99 starting price. Sony and Microsoft are in the middle of a tiny console war; each company is trying to undercut their competitor while providing the more powerful product. If all things were similar with the PlayStation 5, Sony would have to have the PS5's price "be at least $470" to reach similar gross margin.

At launch, PlayStation 4's manufacturing cost was believed to be around $381.

For comparison, the PlayStation 4 retailed for $399 United States dollars and was estimated by IHS Markit to cost $381 USD to manufacture.

One of the biggest problems is supply, with NAND flash memory and DRAM becoming supremely hard to come by.

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.

Maintaining a reasonable price for the console will work directly against newly promised features that promise to make the PlayStation 5 better than its predecessors.

The console will also use a more expensive cooling system to help mitigate the heat generated by higher-powered processors and according to Bloomberg, those systems will cost a few dollars for each unit.

The ongoing coronavirus outbreak has had no impact so far on preparations for PlayStation 5 production, they said. The other alternative for Sony is to book a loss on each console sold, recouping the money through services, like the PlayStation Plus subscription that is effectively mandatory these days given the online-only nature of most games.

The PlayStation 5 is scheduled to launch later this year. Sony also plans its PS5 games to launch on the PS4 at the same time to keep "business performance intact".

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