In an interesting article from Bloomberg this morning, Sony is apparently struggling with pricing the upcoming PlayStation 5 due to the parts becoming more costly. With the global market competing for the same resources across many devices, the price of manufacture is rising. This of course is likely going to impact the Xbox Series X as well.
The company’s biggest headache is ensuring a reliable supply of DRAM and NAND flash memory, with both in high demand as smartphone makers gear up for fifth-generation devices, according to people familiar with Sony’s operations. 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 U.S.
As reported previously, some within Sony are waiting for Microsoft to make the first move with their Series X, while other executives expect more transparency.
People within the PlayStation business unit said a key factor in deciding the ultimate PlayStation 5 retail price will be where Microsoft sets its price for the next-generation Xbox Series X. Microsoft is widely expected to hold that information back until the E3 gaming expo in Los Angeles in June.
There is pressure from CFO Totoki for Sony to provide more transparency and information in the buildup to the PS5’s release, which has caused some consternation internally. Asked about when he expects Sony to provide guidance on the gaming business outlook for the new fiscal year, Totoki said the plan is no different from the recent past, meaning the guidance can be expected around the end of April.
An interesting comment was highlighted in this article though around how the PlayStation ecosystem should be considered “successful”. Sony’s CEO said the following:
Sony’s Chief Executive Officer Kenichiro Yoshida has said the business should be judged by the number of active users, not the number of hardware units sold.
This of course is a different outlook than many expect but signifies the change that is occurring in the videogame industry. While global hardware units sold has always been one of the key indicators of success, times are changing and companies are now aiming to simply have more users playing in their ecosystem, regardless of how they enter.
Our Take
It’s going to be fascinating to watch the new console launches unfold and as always, we love seeing behind the curtain as there are so many factors that drive decision making at the highest levels. Knowing what we know about how powerful the PS5 and Xbox Series X are, and hearing how scarce the resources are to produce them, we won’t be surprised to see $500 and even $600 consoles this fall. Stay tuned!
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