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Sony Says Big PS5 Price Cut Would Be 'Very Difficult'

Thick Thighs Save Lives

Thick Thighs Save Lives

Gold Member
ps5-1707217877308.JPG


Sony has said a dramatic PlayStation 5 price cut would be “very difficult” as the console enters into the second half of its life cycle.

In an investor call viewed by IGN, Sony Interactive Entertainment boss Hiroki Totoki said it's harder to “shrink” the PS5’s die size and therefore cut console manufacturing costs compared to Sony’s ability to cheapen the PS4. “Therefore cost reduction is very difficult, simply put,” Totoki said.

One issue Sony faces as it considers the price of the PS5 during the fourth year of its life is the relatively high cost to shrink the console’s die size compared to equivalent costs during the previous generation. That leaves little room for maneuver, and suggests storage may be the only area of the console Sony could reasonably look to cut costs. All this at a time when the price of components is rising.
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The original PS5 launched at $499, with a cheaper digital-only version priced $399.99. Last year’s PS5 Slim launched at $499.99, again with a cheaper digital-only version but this time priced $449.99.

In the financial call, Totoki said Sony does not want to rely on a PS5 price cut in any case. We want to make sure our business is profitable, as well we want to focus on user engagement, together with sales of units,” he said. “We need to strike a nice balance between all of those components.”

Sustaining user engagement, with the key monthly active users (MAU) metric at its core, is “the most critical thing in our business right now”, Totoki added.
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To that end, Sony is doing well indeed. The company said it saw record high MAUs in December, with 123 million people playing PlayStation. Total play hours are up 13% year-on-year.

However, Sony has revised its PS5 sales forecast for the current financial year down, from its lofty target of 25 million consoles sold to 21 million. This despite a year-on-year increase in PS5 sales for the holiday 2023 quarter, from 7.1 million sold to 8.2 million.
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www.ign.com

Sony Says Big PS5 Price Cut Would Be 'Very Difficult' - IGN

Sony has said a big PlayStation 5 price cut would be “very difficult” as the console enters into the second half of its life cycle.
www.ign.com www.ign.com
 
Robb

Robb

Gold Member
Even if it was easy, why would they do it? I imagine that even if they lower their forecast for the next FY it’ll still be in the 15-20M range, i.e. consoles will still be flying off the shelves.
 
Elysium44

Elysium44

Banned
Spyxos said:
Wow so far into the console generation and it's still not getting any cheaper. At the current price, it is far too expensive for many people.
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Too expensive for whom really? It's a few hundred dollars which you pay once and then can play the latest games for a whole generation. It's an amount of money which would barely pay a week's rent in big cities throughout the developed world. Are console gamers this hard up? If they are then there's hardly any point Sony pandering to them anyway, they must be too penniless to buy games and generate profits for them.
 
midnightAI

midnightAI

Member
Robb said:
Even if it was easy, why would they do it? I imagine that even if they lower their forecast for the next FY it’ll still be in the 15-20M range, i.e. consoles will still be flying off the shelves.
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Exactly.

It also states 'dramatic' price cut not that a price cut isnt possible (It'll happen when Pro comes out)
 
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Mr Reasonable

Mr Reasonable

Completely Unreasonable
Elysium44 said:
Too expensive for whom really? It's a few hundred dollars which you pay once and then can play the latest games for a whole generation. It's an amount of money which would barely pay a week's rent in big cities throughout the developed world. Are console gamers this hard up? If they are then there's hardly any point Sony pandering to them anyway, they must be too penniless to buy games and generate profits for them.
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The cost of living has gone through the roof. Mortgage payments shot up. Add that to every single item you have to buy being more expensive thanks to higher inflation than people are used to.

Loads of people have scaled back on luxury purchases.

You'd probably be surprised how much disposable income average people have.
 
X

Xyphie

Member
The stagnant transistor cost was known about well before the generation even started, look at this sad 2020 guidance from Marvell for instance. 5nm, 3nm etc is even worse. They're just going to bundle a first-party game or two with the console as those are "free". The Microsoft refresh leak telling us that they basically had/has the intention of selling the same hardware 4 years after release at the same $300 and $500 launch price just with 2x storage tells us how dire it really is. If Sony wanted a cheaper console they should've made a PS5 Series S.

dNsjkT4.png
 
StereoVsn

StereoVsn

Member
Oh no, Sony is talking about user engagement…. 😱😅🤦‍♂️

Edit: Note that while large due cost cutting is out, Sony did streamline manufacturing with Slim (one decide with add on va two separate lines), cut cooling, simplified motherboard a bit, and in this time frame GDDR and Flash memory prices fell.

So cost of manufacturing should be lower, they are just taking profits.

IMO this is also partially because their game budgets are out of control, hence that separate thread on COO comments.
 
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TheGodfather07

TheGodfather07

Member
Can sony sell over 100m units without a price cut? I don't think so. Sales will fall off without a price cut. They're already expecting a decline next year, which means less than 21m. If they can still hit 20m, that would be good and then they can cut price in 2025 to keep it steady for another year until a steep decline happens from 2026 onwards.
 
DaGwaphics

DaGwaphics

Member
Unfortunate consequence of the technology getting so expensive to produce I guess. It sucks for those that can't afford it. I know I would have never received my Genesis or PS1 under the tree if the prices had been like this.

As much as we take shots at game streaming, that is probably the only realistic way to get the entry price way down.
 
aclar00

aclar00

Member
Elysium44 said:
Too many gamers are spoiled, expecting real terms price cuts just because they're used to it.
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Dont most product generally decrease at least a bit in price after years on the market?

Conditions are different, but definitely doesnt change expectations. Im sure many people have been holding off in hopes of a price cut.

But Sony has to do what Sony has to do i guess. Im sure they've calculated the ROI on a price decrease vs the expectations of new software sales.
 
Elysium44

Elysium44

Banned
aclar00 said:
Dont most product generally decrease at least a bit in price after years on the market?

Conditions are different, but definitely doesnt change expectations. Im sure many people have been holding off in hopes of a price cut.

But Sony has to do what Sony has to do i guess. Im sure they've calculated the ROI on a price decrease vs the expectations of new software sales.
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No most products don't actually, but electronics did for a while. They did it when inflation was low and crucially when there was still low hanging fruit improvement of technological efficiencies available which could slash costs - but you can't keep doing that forever. A segment of the gaming market has become accustomed to something which was only ever going to be temporary, and took for granted that it would inevitably continue forever.

Other industries don't have this burden of expectation that things will always be cheaper in future so it's time to stop expecting electronics to adhere to it.

Even saying all that, the PS5 slim price HAS fallen in real terms. It released in 2020 at $499 and the new slim model is still $499. If it had simply kept up with inflation it would be $588.
 
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winjer

winjer

Gold Member
If we go only by transistor cost, i's not worth it, as prices per transistor have stagnated.
But it might be worth a die shrink to a newer node, to save on power usage. N5 reduces power usage by ~30%. And N3 by another 25-30%.
So using a newer process node could mean a simpler and cheaper power delivery system and a smaller and cheaper cooling solution. And also, a smaller and lighter console, which reduces material and transport costs.

MB3ibvd.jpg
 
Crispy Gamer

Crispy Gamer

Member
Yeah they aren't trying to miss out on any profit the PS5 haven't sold at a loss since 2021 but the margins seem to be slim. This new guy seems to be all about profits I'm starting to see why Jimbo left it's about to get ruthless.
 
C

crackajack

Member
Elysium44 said:
Too expensive for whom really? It's a few hundred dollars which you pay once and then can play the latest games for a whole generation. It's an amount of money which would barely pay a week's rent in big cities throughout the developed world. Are console gamers this hard up? If they are then there's hardly any point Sony pandering to them anyway, they must be too penniless to buy games and generate profits for them.
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Expecting 299 (then 249 for discless) or maybe even less is probably a thing of the past, still some people expect it. I bought a PS5 earlier than I usually do in a console cycle, since I don't expect huge cuts and would have tried to get one sooner if I knew the price would even go up.
But I am no great customer anyway. Playing a ton of games via Plus, but buying not many outside of it. So Sony has to make bank on anything I get. Colleague of mine waits for a price cut but he is the type that buys games regularly, not necessarily waiting for bargain bin either. Sony could aim for him by eating the costs. Question naturally is, is he the norm? Can afford it, just doesnt want to. Or are those waiting like you assume in the really-can't-basket. I guess it is a super cheap product but consoles are supposed to be the cheap, easy option and PS3 turned the ship around also only after it got way more affordable. A Pro and an actual Slim kinda need 3nm to really make a splash in price and power as their respective target. Which will inevitably kinda ruin a PS6, if a Pro will already offer almost the same prior. We have yet to see what MS really announce later, but selling hw and getting the 30% platform fee might be an increasingly harder uphill battle from now on, and multiplatform might actually be the way to go.
 
Mibu no ookami

Mibu no ookami

Member
TheGodfather07 said:
Can sony sell over 100m units without a price cut? I don't think so. Sales will fall off without a price cut. They're already expecting a decline next year, which means less than 21m. If they can still hit 20m, that would be good and then they can cut price in 2025 to keep it steady for another year until a steep decline happens from 2026 onwards.
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You're ignoring the PS5 Pro and GTA6.

Expecting a decline doesn't mean you're expecting to drop to 5 million units. Anything less than 20-21 million units would be a decline even a 5 percent decline.

It's possible that the PS5 Pro launches for 700 at this rate.

The PS5 will also sell for much longer than the PS4 did and will get support for much longer as well.
 
AncientOrigin

AncientOrigin

Member
HeisenbergFX4 said:
Until the Pro drops anyhow
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Yes i said this in another thread.Pro will be 499 and the normal PS5 will be 399.If I were Sony I would make Pro 399 and normal 299.Normal costs them probably between 300-380 to make.And they make almost full win with the disc drives.They could sell the consoles at a loss because the disc drive will erase any negative
 
Elysium44

Elysium44

Banned
twilo99 said:
If it’s impossible how did we get the xsx down to $350 or whatever it was in December…
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Microsoft can eat the loss, Sony can't?

Microsoft selling the XSX for $350 is just throwing good money after bad anyway, which is why they've put it up again to a more sustainable level, now that the Xbox division seemingly has to start standing on its own two feet and weaning itself off the endless subsidies.
 
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