Here's Why PS5's Rumored $500 Price Point Is Completely Reasonable

The PlayStation 5 will probably cost $500, and while this may seem a bit expensive, it's actually [...]

The PlayStation 5 will probably cost $500, and while this may seem a bit expensive, it's actually a completely reasonable price point when you consider inflation. At the moment of publishing, Sony Interactive Entertainment hasn't disclosed or even hinted at the price of the PS5. However, if you read our recent article about why we think the PS5 will be more expensive than some think, you'll understand that there's mounting evidence that points not to a $400 price point, but a $500 price point. Again, this may seem a bit pricey, but after you adjust for inflation, you realize while this is still $50 more than the PS4 and PS2, it's about the same cost of the PS1, and is drastically cheaper than the PS3.

First up is the PlayStation 4, which cost under $400 to manufacture, which allowed Sony to position the console at $400. This was in 2013 though. In 2020, $400 is roughly $450. Then there's the PS3, the most expensive PlayStation console to date. Back in 2006 it cost $600, which is roughly $770 when considering inflation. Next up is 2000's PS2, which rang in at $300. Interestingly, this translates to essentially the same price of the PS4, $450. Lastly, there's the PS1, which cost the same price as the PS2, but in 1995. Taking into account inflation, the PS1 cost roughly $500 in today's economy.

At first glance, $500 for the PS5 may seem a bit steep, though it's nowhere near as bad as the PS3's launch pricing. However, when you take into account inflation, it's actually pretty reasonably priced. Sure, the PS4 and PS2 are still about $50 cheaper, but it is in line with the PS1 at least.

Of course, there's a chance the PS5 could cost less than $500, but if you read our above linked article, you'll understand why that's unlikely, unless Sony is willing to eat considerable costs up front, which I doubt it will, especially as the current market leader.

That said, $500 is going to be a hard sell for Sony. Not because it's an unfair price point, but because optically half a grand doesn't have that same appeal as $400 or even $450. And with so many people content with their PS4 and PS4 Pros, we could see a slow adoption of the PS5 if it costs $500, which is fine, as long as Microsoft don't come in and undercut them with a price point of less than $500. My general understanding of how much the Xbox Series X costs to manufacture suggests this won't happen though. In fact, I think the Xbox Series X will also cost $500.