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

PlayStation 5

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

High prices for PlayStation 5 parts have pushed up Sony's manufacturing costs for the console, a new Bloomberg report claims.

With the PS5, the company is taking a wait-and-see approach, said the people, asking not to be named because the details are private.

Console manufacturing is typically a narrow margin or loss-leading endeavour; the PS4 launched with a price point of $399 in 2013, and market intelligence firm IHS Markit estimates manufacturing costs were around $381 per unit. Assuming Sony wants to keep the same profit, a $450 manufacturing cost would mean the device would have cost at least $470.

According to the source, Sony already locked down most of the components for the PlayStation 5.

DRAM and NAND flash memory costs are apparently to blame - as these components are also in high demand from smartphone manufacturers. Sony Chief Executive Officer Kenichiro Yoshida argues that one should judge business by active users over hardware sales. The next two consoles promise to be particularly powerful, so it will require an excellent cooling system to be sure to dissipate the heat emitted. It's worth noting that the ongoing Coronavirus outbreak has had no impact on PlayStation 5's production preparations. They will be used for the RAM of the console and its SSD storage.

According to Bloomberg, Sony is planning a new bit of VR kit, with a release date set just after the PS5 launches. This includes the cooling system, which usually doesn't cost much but Sony chose to spend more in order to make sure that heat dissipation won't be an issue for the new console.

Sony also believes that this console transition will be a more gradual one than previous generations.

The outlet also reports that numerous games launched for PlayStation 5 will also be available to play on PlayStation 4.

Microsoft may very well wait until E3 to reveal the pricing of the Xbox Series X, so it may be a while, if Sony chooses to continue waiting, until pricing is known from the next PlayStation.

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. Decades ago, Nintendo tasked Sony with developing a CD-ROM add-on for the wildly popular SNES game console.

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