In a nutshell: Both the PlayStation 5 and Xbox Series X are due to arrive this holiday season, but for Sony, deciding what price its machine will sell for is proving difficult. Because of component shortages and their high cost, the build price of the console is said to be around $450, meaning the MSRP could be around $470 or more.
Bloomberg reports that Sony usually finalizes a console’s launch price in February of the release year, with mass production starting in the spring. But with the PS5, choosing the MSRP is proving difficult.
IHS Markit estimates that it cost $381 to manufacture the PS4, which sold at a retail price of $399. That would put the PS5’s release price at around $470, making it a lot more expensive than the PS4 Pro, which is $399 but often discounted as low as $299.
One of the biggest issues for Sony is securing a reliable supply of DRAM and NAND flash memory, which is in high demand thanks to smartphones such as the Galaxy S20, which come with a minimum of 12GB of RAM.
It’s been reported that the disruption caused by the coronavirus could impact or even delay the PlayStation 5 and Xbox Series X, but Sony says the outbreak hasn’t affected production, at least not yet.
Consoles were traditionally sold at a loss, with companies making profits from software sales and subscription services. Sony lost billions on the PS3 at launch but made sure the PS4 was profitable. Some at the firm believe it should take a loss on the PlayStation 5 if it means the price is competitive with the Xbox Series X, though others would prefer if it to make a profit like the PS4.
In addition to the expensive flash storage, the PS5’s manufacturing cost will be pushed up by the high-end AMD GPU. Sony is reportedly spending more than usual on the cooling system, too, ensuring all that hardware doesn’t overheat.
The report also states that a new PlayStation VR is being developed and will release soon after the PS5 launches. We've seen in previous reports that the PSVR 2 will be a major upgrade over the current headset, featuring an AR mode, eye/head-tracking tech, and cost $250.
To get our take on what the successors to the PS5 and Xbox Series X will look like, check out the Future of Tech: Consoles feature.