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Drama Rumor Clickbait Source: PlayStation 5 to adjust plans in response Xbox Series X pricing

Apr 19, 2020
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I cannot see a 100 difference between the Disc and Digital version with only the Digital having no Disc drive wile everything else is the same as the Disc version. Is a blue ray drive really worth the 100 difference it does not add up so my guess would be still 549 Disc 499 Digital or 499 Disc and 449 Digital.
 

Kerotan

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The digital ps5 would make back more losses for obvious reasons. €400 is more likely with MS farting out a €300 turd. Competition is good.
 
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thebigmanjosh

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If Microsoft had to:
  • Lower the CPU Clock speeds
  • Cut GPU CU counts
  • Halve the SSD size
  • Rebuild a new form factor
  • Drop the optical media drive
  • Create alternative pricing models
All to just hit USD$299, Sony cannot deliver the PS5 at $399 by just dropping the optical media disc - not when they're pushing similar specs, with an above-PC IO pipeline and a controller riddled with microphones, speakers, and haptics. I've said it before: I don't think Sony created the DE to undercut Microsoft - I think it created the DE to compete with Microsoft because the base PS5 came out expensive. PS5$599 and PS5DE$499.

PS5 may not come in at $399, but it will most certainly not be $599.

Some of your points don't hold water:
  • Lower the CPU Clock speeds<--This is more likely related to heat and a smaller form factor.
  • Cut GPU CU counts<- cutting the die size by half is likely how they got close to $299
  • Halve the SSD size<--and this.
  • Rebuild a new form factor<--adds cost, not reduces. Two separate supply and manufacturing lines vs. identical parts in PS5. The two panels design was likely intentional to keep parts nearly identical and reduce production costs.
  • Drop the optical media drive<-- ~$30 savings
  • Create alternative pricing models<--Many tech companies do this now. It's actually a workaround for them to not subsidize costs while still keeping the product accessible to consumers.
Forgot:
  • Cut RAM quantity by ~40%.
 

LarknThe4th

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Hmmm.... a 400 Euro Ps5 would be a big money loser in the short term for Sony, but in the long run it I believe would be a killer blow to Microsoft, another generation of being a distant number three would pretty much kill the hardware part of Microsofts gaming plans, which would again in the long run Leave Sony as the dominant player in an entire sector of the industry(just like Nintendo have the hybrid market all to themselves now and are thriving)

Could be worth it in the end
 
Oct 26, 2018
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True, but it is funny when people essentially think 'this GPU would cost me $299, so obviously a company ordering 25 million of them would pay at least $295"
That's gaming nerds for ya.

iPhone sells for $1,000. No way it costs Apple $1000 to make it

Jeans sells for $100. No way it costs them $100 to make it

GPU or SSD part sold externally in its own box sells for $400. Uhhhhh guys, a similar OEM part in Xbox or PS will be $400
 
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ZehDon

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PS5 may not come in at $399, but it will most certainly not be $599.

Some of your points don't hold water:
  • Lower the CPU Clock speeds<--This is more likely related to heat and a smaller form factor.
  • Cut GPU CU counts<- cutting the die size by half is likely how they got close to $299
  • Halve the SSD size<--and this.
  • Rebuild a new form factor<--adds cost, not reduces. Two separate supply and manufacturing lines vs. identical parts in PS5. The two panels design was likely intentional to keep parts nearly identical and reduce production costs.
  • Drop the optical media drive<-- ~$30 savings
  • Create alternative pricing models<--Many tech companies do this now. It's actually a workaround for them to not subsidize costs while still keeping the product accessible to consumers.
Forgot:
  • Cut RAM quantity by ~40%.
Ah, forgot the RAM - it's also slower RAM than the Series X as well, which could infer cheaper chips. A lot of your post is adding specificity to my inferences - cutting CU counts shrinks the amount of space needed by proxy, for example - but, if you need that additional information for my post to make more sense, power to you, you're certainly not incorrect.

You didn't really address the PS5's price other than "no it won't". It's quite a bit larger, which would lend credence to the claims of a more robust cooling requirement driven by the GPU clock speeds (conjecture on my part, of course). It's featuring a fully custom IO pipeline, based around NVMe drives that are not commercially available to the public yet, and Sony have been sure to pack in many additionals, such as padding out the controller with more features, which all add to the manufacturing cost of the final retail box that consumers will be lining up for. Pricing it on par with the Xbox Series X makes sense, but if Sony could deliver $399, we'd have heard about it by now, given how much of a kill shot that was last generation. Everything I'm seeing, from Cerny's talk to Jim Ryan's comments, tells me Sony are positioning this as a "Premium Console" with a price tag to match.
 

Unknown?

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That’s exactly what Sony did when MS announced Xbox One for 499, they dropped it last minute to 399. So never say never.
Sure but the hardest thing to believe is that it was going to be considerably more expensive
 

MrFunSocks

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If Microsoft had to:
  • Lower the CPU Clock speeds
  • Cut GPU CU counts
  • Halve the SSD size
  • Rebuild a new form factor
  • Drop the optical media drive
  • Create alternative pricing models
All to just hit USD$299, Sony cannot deliver the PS5 at $399 by just dropping the optical media disc - not when they're pushing similar specs, with an above-PC IO pipeline and a controller riddled with microphones, speakers, and haptics. I've said it before: I don't think Sony created the DE to undercut Microsoft - I think it created the DE to compete with Microsoft because the base PS5 came out expensive. PS5$599 and PS5DE$499.
Not only that, but Sony have to manufacture a different case for the console without the optical media disc, so that will add a few bucks back on.
 

Azelover

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Sorry, but I don't believe this.

It's too late to change things in any significant way.
 
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thebigmanjosh

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Ah, forgot the RAM - it's also slower RAM than the Series X as well, which could infer cheaper chips. A lot of your post is adding specificity to my inferences - cutting CU counts shrinks the amount of space needed by proxy, for example - but, if you need that additional information for my post to make more sense, power to you, you're certainly not incorrect.

You didn't really address the PS5's price other than "no it won't". It's quite a bit larger, which would lend credence to the claims of a more robust cooling requirement driven by the GPU clock speeds (conjecture on my part, of course). It's featuring a fully custom IO pipeline, based around NVMe drives that are not commercially available to the public yet, and Sony have been sure to pack in many additionals, such as padding out the controller with more features, which all add to the manufacturing cost of the final retail box that consumers will be lining up for. Pricing it on par with the Xbox Series X makes sense, but if Sony could deliver $399, we'd have heard about it by now, given how much of a kill shot that was last generation. Everything I'm seeing, from Cerny's talk to Jim Ryan's comments, tells me Sony are positioning this as a "Premium Console" with a price tag to match.

That's my bad. I used your post to focus in on what likely drove down the XSS price without really finishing my thoughts.
  • APU: We know the I/O for both XSX/PS5 both have dedicated hardware like decompression units, etc. so I would consider that a wash for now. PS5 has ~70% the CU's with everything else largely the same. From the hot chips presentation, we know that APU costs have risen exponentially this gen, so that ~reduction could mean big savings if the chip is ~260mm-300mm or 70%-80% of the total cost/chip.
  • SSD: We know Sony is using more (12) vs. larger chips to get to their 5.5GB/s speeds, so this may be a wash. If we simply go by NAND price per GB ($0.05 max), its ~$50 for XSX and ~$40 for PS5. Not significant.
  • Cooling system could be more elaborate, but the Bloomberg article on the PS5 BOM estimated it to add only a few dollars per unit. I will consider this a wash when comparing the costs of separate manufacturing lines for XSX/XSS.
So let's say the optical drive, cooling, and SSD account for ~$45-$50 difference between PS5 DE and XSX before factoring in the savings from a smaller APU. That's why I don't see PS5 selling for more than $499, especially considering how the PS3 fiasco which fundamentally changed Sony as an organization.

As for announcing price, there's much more consumer confidence in the PS brand and Sony knows it. It's allowed them to wait MS out knowing they've needed to make a case to consumers as to why they should switch back over or continue investing in their platform by essentially laying out their 2-3 year plan. Sony dropping a $399 price tag in June vs. next week makes absolutely no difference in the grand scheme. At least now there will be a near constant stream of news between the PS5 blowout and launch vs months of downtime.

I've also said it before, but I could be totally off the mark and Sony could shit the bed with PS5. I just don't think that's what's happening based on everything we know and my personal views.

Not only that, but Sony have to manufacture a different case for the console without the optical media disc, so that will add a few bucks back on.

I'm pretty sure the console was designed around this difference. It's basically the drive and one plastic panel. MS is likely spending significantly more by having two separate supply and manufacturing lines for XSX/XSS.
 
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MrFunSocks

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I'm pretty sure the console was designed around this difference. It's basically the drive and one plastic panel. MS is likely spending significantly more by having two separate supply and manufacturing lines for XSX/XSS.
I'm sure MS are, but MS have made massive cuts to all the parts of the system apart from CPU to make up for it. Sony removed the cheapest part of the console but had to make a new part of the case, even if it's just one plastic panel.
 

ZehDon

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That's my bad. I used your post to focus in on what likely drove down the XSS price without really finishing my thoughts.
  • APU: We know the I/O for both XSX/PS5 both have dedicated hardware like decompression units, etc. so I would consider that a wash for now. PS5 has ~70% the CU's with everything else largely the same. From the hot chips presentation, we know that APU costs have risen exponentially this gen, so that ~reduction could mean big savings if the chip is ~260mm-300mm or 70%-80% of the total cost/chip.
  • SSD: We know Sony is using more (12) vs. larger chips to get to their 5.5GB/s speeds, so this may be a wash. If we simply go by NAND price per GB ($0.05 max), its ~$50 for XSX and ~$40 for PS5. Not significant.
  • Cooling system could be more elaborate, but the Bloomberg article on the PS5 BOM estimated it to add only a few dollars per unit. I will consider this a wash when comparing the costs of separate manufacturing lines for XSX/XSS.
So let's say the optical drive, cooling, and SSD account for ~$45-$50 difference between PS5 DE and XSX before factoring in the savings from a smaller APU. That's why I don't see PS5 selling for more than $499, especially considering how the PS3 fiasco which fundamentally changed Sony as an organization.

As for announcing price, there's much more consumer confidence in the PS brand and Sony knows it. It's allowed them to wait MS out knowing they've needed to make a case to consumers as to why they should switch back over or continue investing in their platform by essentially laying out their 2-3 year plan. Sony dropping a $399 price tag in June vs. next week makes absolutely no difference in the grand scheme. At least now there will be a near constant stream of news between the PS5 blowout and launch vs months of downtime.

I've also said it before, but I could be totally off the mark and Sony could shit the bed with PS5. I just don't think that's what's happening based on everything we know and my personal views.



I'm pretty sure the console was designed around this difference. It's basically the drive and one plastic panel. MS is likely spending significantly more by having two separate supply and manufacturing lines for XSX/XSS.
Good post, thanks for the detail. I suppose my thoughts are around you declaring certain changes "a wash". While it might appear a wash to us, console to console, a 50 cent change in hardware is a $5,000,000 cost change for Sony's planned 10m consoles in the launch window. A $10 increase in NAND spending is a $100,000,000 cost increase, just for the launch window. 20% here, 10% there... at these scales, the cost of manufacturing adds up quickly. And I'm just focusing on the launch window. Sony will looking at the cost of this hardware across seven years, with projections for cost decreases where appropriate. Cerny is obviously more than aware of this stuff, and I appreciate his expertise, but there was enough smoke around potential cooling issues - and we've yet to have a tear down or diagram of the internals of the PS5 - that I can see the potential for things to have gone awry. Add in the controller - which Microsoft kept the same, while PlayStation re-designed entirely - and the cost of the box has potential to creep up, in my opinion.
If Sony are willing to take a steeper loss - and they certainly have brand momentum, so it's entirely possible - they could deliver an unexpectedly low price. However, I think the PS3 taught them the need to ensure profitability isn't dependent on deep software attach rates. I see a high price point incoming. It'll be interest to see the final results when Sony do announce their prices.
 

Unknown?

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Good post, thanks for the detail. I suppose my thoughts are around you declaring certain changes "a wash". While it might appear a wash to us, console to console, a 50 cent change in hardware is a $5,000,000 cost change for Sony's planned 10m consoles in the launch window. A $10 increase in NAND spending is a $100,000,000 cost increase, just for the launch window. 20% here, 10% there... at these scales, the cost of manufacturing adds up quickly. And I'm just focusing on the launch window. Sony will looking at the cost of this hardware across seven years, with projections for cost decreases where appropriate. Cerny is obviously more than aware of this stuff, and I appreciate his expertise, but there was enough smoke around potential cooling issues - and we've yet to have a tear down or diagram of the internals of the PS5 - that I can see the potential for things to have gone awry. Add in the controller - which Microsoft kept the same, while PlayStation re-designed entirely - and the cost of the box has potential to creep up, in my opinion.
If Sony are willing to take a steeper loss - and they certainly have brand momentum, so it's entirely possible - they could deliver an unexpectedly low price. However, I think the PS3 taught them the need to ensure profitability isn't dependent on deep software attach rates. I see a high price point incoming. It'll be interest to see the final results when Sony do announce their prices.
That's why things just don't add up. Sony couldn't honestly have thought significantly over $499 would be selling 10m launch window.
 
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Hezekiah

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Then Sony is going to have some financial losses that'll be harder for Sony to swallow than MS. Just like they did for the PS3 and almost went bankrupt.
The PS3 cost almost $800 to produce early on. Your post sounds like nonsense (and wishful thinking). It's not going to be $600.
 
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exactly. the price point was made months ago and retailers have already been told.

Pretty much. If a 399$ or a 499$ price appears it won't be because of a reaction to Microsoft. When they develop the hardware they always have a target for the MSRP. I agree that the figure can change but it isn't going to be way off what they originally targeted.
 
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ZehDon

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That's why things just don't add up. Sony couldn't honestly have thought significantly over $499 would be selling 10m launch window.
Yeah, it's certainly odd. I don't claim to have all the answers.

Let's go worst case scenario: if the DE lands at $499.00 and the base model at $599.00, I think the DE will still shift a considerable amount of units in the first six months. Right now, gaming is booming. Nintendo can't manufacturer Switches fast enough. The momentum moving into next gen is absolutely with Sony, and they know they could get away with that price tag on brand strength. Microsoft needs the budget consumers because Sony destroyed them in market-share this generation. Is Sony over-estimating the strength of their brand? I don't know - they (and Microsoft) pushed Nintendo out of the hardware arms race, and they pushed Microsoft into a corner last gen. Who knows?
 
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At the end of the day, we have no idea how expensive the production is. When articles make assumptions of prices, they often take retail prices of single parts, but Sony as one of the biggest players in the electronic market have strong relationships with many part developers and get great deals for mass purchasing these parts.

Now, we also need to consider that even when the production costs are very high, it is not unheard of for a console manufacturer to take a loss in the beginning at the console sales, because they make their money with software and not hardware.

At the same time, I fear that Sony will still go high, because they know that they can ask for a lot, because gamers know that the majority of their first party lineup are truly great games. And I am sure that the trend continues, because they seem to have a close eye on their developers, not like Microsoft, who put probably put a blind eye to 343 until they recognized that Halo in its current state is not a must play title. Also Sony is very carefully selecting when purchasing studios, who fits inside their group and what would be a great addition to their studios.

Still I do believe that they want to match the price of Microsoft, so I also predict 499 for the disc version and 449 for the digital edition.
 
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thebigmanjosh

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Will be quite surprised if they change prices to 399/299 after SeS reveal.

would be a megaton.

I don’t think they would price the DE the same as XSS at $299 even if it was possible.

It would likely cause confusion and cause people to think it was cut down power-wise in the same way XSS is to XSX. They can charge $50-$100 more and lean in to “get double the power for only $XX”.
 
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What microsoft and sony spends on their boxes isn't important. What consumers want to pay for them that's what's important.

I have a hard head seeing these boxes selling for 500 bucks to your average non neogaf crowd which probably takes up most of their audience.

I personally think 399 is the sweetspot and 299 for holiday seasons after it with a game. If they can't hit those targets they simple overenginered those boxes to the point its out of people's price range.

If they only went with a cheapo 6 core ryzen and a sata 3 ssd, with 1080p and 7-8 tflop performance dropped last year. then drop a new gen 5 years ( 4 years from now ) later and launch it for 299.
 
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megreotsugua

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I cannot see a 100 difference between the Disc and Digital version with only the Digital having no Disc drive wile everything else is the same as the Disc version. Is a blue ray drive really worth the 100 difference it does not add up so my guess would be still 549 Disc 499 Digital or 499 Disc and 449 Digital.

It's about penetrating the market and selling out all the 10 million they have planned for the first year alone. $399 is the sweet spot and they know it.

The question is how would they achieve that without bleeding too much money?
That's right, and all-digital console where all purchases come from PSN - no second hand sales. The ROI with the digital edition is high that initial loss wouldn't matter that much.
 

MrFunSocks

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That's why things just don't add up. Sony couldn't honestly have thought significantly over $499 would be selling 10m launch window.
Sony don't think they're selling 10 million in the launch window lol.

Do people seriously think the PS5 Digital is gonna be $299? If they could do that, the S wouldn't exist and MS would just release the X at $299 too.
 
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Unknown?

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Sony don't think they're selling 10 million in the launch window lol.

Do people seriously think the PS5 Digital is gonna be $299? If they could do that, the S wouldn't exist and MS would just release the X at $299 too.
Then why did they double production? Obviously they felt it was necessary to not have shortages.
 

megreotsugua

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Sony don't think they're selling 10 million in the launch window lol.

Do people seriously think the PS5 Digital is gonna be $299? If they could do that, the S wouldn't exist and MS would just release the X at $299 too.

Most of us think it'll be $399 for the DE. And it's how Sony is selling 10 million units in the first year.
 
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Unknown?

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Obviously but they would be dumb if they thought the demand was there at $600 or more. Which is why I don't buy this. 1) It doesn't align with any other rumors we've been hearing and 2) Sony would not have targeted a $600 price point from the get go.
 

Moonjt9

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Lmao this is exactly like that crap with PS4 allegedly removing online drm “at the last minute” as a reaction to Xbox. Pure FUD.
 
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Obviously but they would be dumb if they thought the demand was there at $600 or more. Which is why I don't buy this. 1) It doesn't align with any other rumors we've been hearing and 2) Sony would not have targeted a $600 price point from the get go.

Definitely agree there. I don't think they rubbed their hands together and thought that people would buy a PS5 at any price.



They most likely set the BOM of the system based off estimations on what consumers are willing to pay for it. Which is why I doubt they thought a 599$ price point was acceptable especially after people got used to 499$ and 399$. Most likely the PS5s price will be in the same ballpark as the XSXs. Not the XSS because theres no way they can hit that low without making sacrifices to the hardware.
 

thebigmanjosh

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Some people are saying 10 million units in the launch period, that's what I'm saying isn't happening. Year? sure. Launch? No.

The reports from Nikkei and Bloomberg said they would increased production from 5-6 million to 10 million by the end of this year. 5 million by September, and another 5 million between October and December.

 

michaelius

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Several shops already leaked ps5 to be around that 500 euro price point so putting this as panic move seems like reach.
 

MrFunSocks

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The reports from Nikkei and Bloomberg said they would increased production from 5-6 million to 10 million by the end of this year. 5 million by September, and another 5 million between October and December.

Ah yes, unnamed sources.

They don't plan on selling 10mil in a month or 2.
 

thebigmanjosh

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Ah yes, unnamed sources.

They don't plan on selling 10mil in a month or 2.

It shocks me when people don’t understand how sources work, especially for highly reputable organizations like Nikkei/Bloomberg.

And of course they won’t sell them all by the end of 2020, but that’s not the point. Nearly doubling volume during the launch period means 1) they’re confident in their ability to ship and sell through that amount and 2) Production is going much better than expected.
 

Thickandblack

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I cannot see a 100 difference between the Disc and Digital version with only the Digital having no Disc drive wile everything else is the same as the Disc version. Is a blue ray drive really worth the 100 difference it does not add up so my guess would be still 549 Disc 499 Digital or 499 Disc and 449 Digital.
I thought the same exact way as you until someone pointed out that sony can sell the digital at a loss because it will make way more money selling digital games. Also if it is 50 difference i cannot see anyone getting the digital.
 

ethomaz

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What exactly Sony needs to adjust?
 

MrFunSocks

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It shocks me when people don’t understand how sources work, especially for highly reputable organizations like Nikkei/Bloomberg.

And of course they won’t sell them all by the end of 2020, but that’s not the point. Nearly doubling volume during the launch period means 1) they’re confident in their ability to ship and sell through that amount and 2) Production is going much better than expected.
Increasing production for the start of the generation means nothing because they are not going to only sell 10 million in the lifetime of the console, so there’s zero risk in making them now.

I haven’t seen anyone question their ability to make consoles, or sell them. People are saying they’ll sell 10 million on launch. They won’t.