The PS5 is poised to release this holiday season, and, at the moment of publishing, we have no clue how much the PlayStation console will cost. In fact, not only has Sony not divulged a price point, but it hasn't even revealed what the console looks like. That said, while we don't even have the slightest indication of what the console's design is, we do have a pretty good idea of how much it will cost thanks to reports about its manufacturing costs and what Sony has teased in the past.
In order to predict the price of the PS5, first, you need to look back at what Sony has charged in the past for its consoles at launch. Back in 2013, the PS4 launched at $400, which is roughly $450 in today's market when you factor in inflation. This is pretty cheap, but the PS4 reportedly cost less than $400 to manufacture.
Then there's the PS3, the most expensive PlayStation console to date. In 2006, it launched at a crazy $600, which is roughly $770 once inflation is added to the equation. There's no way Sony will make this mistake again. How do we know this? Because it has already said it won't.
Then there's the PS2, the best-selling home console of all time. When it released in 2000, it rang up at $300, which is about $450 in today's money. In other words, it was a similar price to the PS4.
Lastly, there's the PS1, which also cost $300, but in 1995. This means it would have cost $500 in today's economy. As you can see, the PS3 is the outlier here, while $450-$500 has been the sweet spot for Sony over the years.
According to recent reports, the PS5 costs roughly $450 to manufacture. This is the price to just create the console, and doesn't include packaging, shipping wholesale, and the cut retailers will take. When you take all these things into consideration, the PS5 will probably cost Sony about $470 per unit. A console also comes with a controller, and typically a game or two, which are also costs to consider.
This begs the question: could Sony sell the console at $450 at eat some of the costs upfront in order to push units off shelves? It's possible. PlayStation has done this in the past, but it's a risky gamble. Sure, Sony will probably make money on the back end via software and services, but that's a lot of costs to absorb initially. Selling each console at a $20 loss would quickly add up. For example, if Sony sold the PS5 at a $20 loss for the first 10 million consoles, that would be a loss of $200,000,000. That's a lot of money, even for a company of Sony's size. And when you consider that Sony is the current market leader, there's little reason for them to sell at a loss for the first year or two.
The PS5 will cost $500, or at least that will be the starting price point. Sony has hinted at the PS5 being a bit on the pricey side in the past, which certainly rules out a $400 price point. Meanwhile, rarely do consoles sell at the $50 mark, and if Sony were to choose $450, it would require it to eat some of the costs upfront, which it won't do. At this point, everything points to a $500 price point. There's no way it makes the mistake of charging $600 again, and again, consoles rarely will sell at the $50 mark at the start of the generation, which rules at $550.
That said, as always, feel free to leave a comment letting us know what you think or hit me up on Twitter @Tyler_Fischer_ and let me know over there. How much do you think the PS5 will cost at launch?1comments