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Bloomberg: PlayStation 5's Bill of Materials have been pushed up to $450 due to scarce NAND and DRAM components
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When were they considered toys? What a crazy question. Always. Forget about "adjusted for inflation". First, it's nonsense; not everything "inflates" at the same rate. I bought the NES at 15 with a weekend-only job that paid shit. It wasn't unaffordable at all.
Second, an expensive toy is still a toy. The 2600 and NES are what kids, including myself, wanted (and got) for Christmas in their time. The PS4 and Switch are what kids want now. And the PS5 and Xbox SX are what they'll ask for for Christmas this year. They're toys. Games are toys. As adults, we might like to call them by fancier names, but they're still toys.
Personally they stopped being toys the moment they were capable of playing your favorite porn DVD. Not to mention what you can access online with their web browsers. They're definitely not the "toys" they were when the 2600 and NES came around.
What a bizarre comment. Toys aren't just for kids, you know.
PlayStations are absolutely pure leisure products. It's right in the name. They're playthings.
It's funny because people with ATVs, motorbikes, and jet-skis — other leisure products for adults, all of which are much more expensive than a PlayStation — refer to those as their "toys" all the time. But on Era people are all "my playstation is NOT a toy!! you can watch porn on it!!1"
Wild that a presidential candidate hopped into the highly contentious world of pre-release console hype.
Of course anything can be your "toy". But that's not what we're talking about. Game consoles used to carry the stigma that they're toys.... for kids. And in that sense they're not. Not when you can access the aforementioned. At least not to me.
Really cool that Albert Penello stopped by. If there's anyone out there in a position to talk about the logistics of a console launch, he's someone we should definitely listen to.
Back to the point though, I like that he still thinks it's possible for a $399 launch price. If Sony doesn't have the power advantage (or at least an equal amount of power) it would indeed be a tough sell for them to cost as much as a Series X. I don't think Microsoft would have the audacity to match their $400 price point with the XseX even if Sony did go that low — that's what Lockhart is for, guaranteed.
Back to the point though, I like that he still thinks it's possible for a $399 launch price. If Sony doesn't have the power advantage (or at least an equal amount of power) it would indeed be a tough sell for them to cost as much as a Series X. I don't think Microsoft would have the audacity to match their $400 price point with the XseX even if Sony did go that low — that's what Lockhart is for, guaranteed.
This seems to line up with my thoughts anyways that Sony has always prepared for a 399 launch with a similar setup to this generation and Microsoft is going to go beyond that with a 499 console and whatever top flight tech that can be put in those boxes at those price points. If any of this is true, both might be in a precarious spot but since Sony is highlighted here and 399 seems to be their sweet spot, I wonder how all of this is going to play out.
Makes things interesting going into next gen. Really hard to tell how things will shake out.
Okay.
So I think here is where it can stand.
Let's say your typical launch day buyer gets around 3 years of PS+ on average, throughout the life cycle of a system. That in itself is around 3 years, or $180 that PSN owners can have. They can kiss that goodbye if Xbox is the same price and more powerful. If Xbox starts to get momentum, that truly undercuts playstation and their profits. Because not only will they lose the sub if their player drops out, they will lose that sub for the rest of the generation. That's not to mention software sales cuts, digital sales in general, DLC, micro transactions, ect.
It is way better to take that $50-$100 cut, because they will truly make that back. Meanwhile, it is super important that Sony undercuts Microsoft. They kind of have to. Not only does console sales matter, but ecosystem are where Sony gets the most profit. If they start losing customers. Well, for each customer that jumps ship, on average, that probably like losing 180+ and complete software sales.
So I think here is where it can stand.
Let's say your typical launch day buyer gets around 3 years of PS+ on average, throughout the life cycle of a system. That in itself is around 3 years, or $180 that PSN owners can have. They can kiss that goodbye if Xbox is the same price and more powerful. If Xbox starts to get momentum, that truly undercuts playstation and their profits. Because not only will they lose the sub if their player drops out, they will lose that sub for the rest of the generation. That's not to mention software sales cuts, digital sales in general, DLC, micro transactions, ect.
It is way better to take that $50-$100 cut, because they will truly make that back. Meanwhile, it is super important that Sony undercuts Microsoft. They kind of have to. Not only does console sales matter, but ecosystem are where Sony gets the most profit. If they start losing customers. Well, for each customer that jumps ship, on average, that probably like losing 180+ and complete software sales.
Thanks for sharing this.
Honest question cause I'm no expert at all, but how could they sell something 399 if the cost of components alone is 450? It doesn't take into account r&d, marketing, logistics or retailer margins... It seems like they would take a huge loss, wouldn't they ?
No,
This is indeed what I meant.
Actually hoping it'll be a bit more expensive this time around for that reason.
Lol the PS2 wasn´t even released in the late 90s let alone the cheapest DVD player. You could get a cheap DVD player for 50 in 2002, maybe twice that in late 2000 when the PS2 hit the western markets.
I can tell you for a fact that media space is typically bought in bulk at the beginning of the year (for most brands that plan a launch of something). This isn't going to affect anything
PS Direct the night after MS Presents at E3, $100 cheaper. Show the launch games. Tease what's coming. Done deal.
That said. Bleeding Edge is pure flames. I think they have something.
That said. Bleeding Edge is pure flames. I think they have something.
That and Nintendo themselves regards gaming as a 'toy'. Nintendo is also a toy company that made stuff like Ultra Hand.
In Japan, it was definitely sold as a cheap DVD player. I mean, the most played thing on a Playstation 2 in Japan in its early years was Spiderman 2.
You could find DVD players in late 2000-early 2001 for $100. They weren't the greatest but we're talking about the cheapest. I'm not disputing that people in Japan watched a lot of Spiderman 2 (I wasn't there so I don't know) but it would probably be because there wasn't much compelling software early on as opposed to the reason being that it was the cheapest DVD player.
Are we talking about the US or Japan? Because in Japan, DVD players were noticeably more expensive. Heck, DVDs themselves are still more expensive in Japan to the point that movies or popular anime on DVD don't really sell.
Don't know about the japanese prices but the PS2 launched for over 400€ in Europe. A standard DVD player was nowhere near that price.
I can only speak from personal experience in the USA but I find it hard to believe that we had $100 DVD players and the cost in Japan was higher than the price of a PS2. But, again, I wasn't there so you may be correct.
Yep singling the Sony crowd to save up another $100. Extra overtime, weekend working whatever it takes.
It was a long time ago, so I may have details wrong. I do remember the PS2 being considered a cheap DVD player in at least Japan during its early years, but could be cheap for the quality of the player. I believed that PS2 had a very good player for its price tag.
It was a pretty good player for the price in the US so I could see that being the case in Japan too, especially if the price of their players skewed higher. You could get a comparable player for a bit less in the US but you also got a PS2 for games in the process (plus it had a "prestige" around it selling out and such) so I knew a lot of non-gamers who picked up a PS2 in the first year.
lol Sony would be the one more willing toloss lead at $399-449 at this point rather than MS especially since MS is trying to sandwich them with Lockhart and XSX.
LOL - do you understand that a shortage effects everyone? Lockhart's main differentiation wasn't the SSD but a cut down GPU.
A 499 PS5 means-
599 Series X (if they were targeting 499)
399 Lockhart (if they were targeting 299)
The victory laps being run because Sony has to increase price misses the point that Microsoft will also suffer the same sensitivities. There are no winners here unless you own stock in micron.
That's the question.
Albert's analysis fails to mention that Microsoft will suffer similar headaches with pricing.
Both consoles will increase price by a similar margin if the component shortage is the SSD / DRAM.
Because he doesn't know if they suffer from the same problem or not? or he can't say anything about these coz of NDA.
but still i can't see a 100$ difference again
As someone with zero interest in these consoles (I play on PC exclusively) I still find the whole process leading up to a console launch rather fascinating. There are not many other hardware markets where if you fumble a device's launch you're essentially screwed for seven or so years. Every other sector releases products at such a rapid pace that one year's disaster can turn into another year's triumph, yet in the console market you either get it completely right or you're straight up boned and have to wait many years for another chance.
As for the price point debate, I think that $499 is too much for what is essentially a single-purpose device for gaming. Yes, you can do other stuff on it but the rise of smart devices (especially smartphones) means that people already own multiple devices that can do all the extra stuff that a console does.
As for the price point debate, I think that $499 is too much for what is essentially a single-purpose device for gaming. Yes, you can do other stuff on it but the rise of smart devices (especially smartphones) means that people already own multiple devices that can do all the extra stuff that a console does.
Depends on how early those resources were signed and contracted for. If Microsoft knew what their needs were last year and bought in volume at X price then a shortage won't hurt them as bad. It's unlikely but possible given that for memory Apple had previously bought chips years in advance for mobile devices.
Game systems can turn it around after a lackluster launch like the DS, 3DS, and even the Xbox 360 with the whole Red Ring of Death. Even the PS3 managed to turn around somewhat during its final years. It's just extremely hard since the gaming market tend to latch on to one system as the dominated, while every else get scraps. This time period is one of the few exceptions with the Switch and the PS4 both doing extremely well and breaking records. The only thing close was the SNES and Genesis in the US.
This screams controlled leak to me. Allow this to get out and make MS think Sony is going to price it a certain way in order to undercut in price again.
PS5 can easily pull off a $500 price point, as long as the specs compare favorably, or are on par with the Xbox equivalent.
I don't prescribe to this idea that Microsoft and / or Sony pulled a fast one whilst the competitor trip and fell on egg shells that increased price / lowered performance. That's nonsense.
LOL
Now with that one out of the way, as per windowscentral
Sony allegedly 'struggling' to keep PlayStation 5 price down. What's it mean for Xbox Series X?
Short supply and high prices of DRAM may force Sony to raise prices, but Microsoft may not have the same problem. Still, market uncertainties exist, and questions remain.
www.windowscentral.com
With this said, there are possibilities that this affects Sony more than MS. So perhaps being ultra sure that both will be affected is a bit "High Horse:y"
I think that Nintendo's portables and the 360 were allowed a mulligan mainly because of the lack of competition.
The DS was up against the PSP, which had a very good launch and was even ahead of the DS in the US. Then the DS Lite happened. That and the 360 was against the Wii who washed it outside of the US.
Services are a much larger part of the profit than 7 years ago, especially for Playstation. I think it's still possible we see a $399 PS5 so they can transition users from PS4 to PS5 as quickly as possible. I think they would be willing to take a loss like that since they'll end up making a larger profit from online subs and the like, especially if they bundle PS+ and Now together.
This is a great point...but what if they literally cant build them. Theres a world wide shortage on nand and dram with prices expected to raise by upto 40 percent through the remainder of 2020.
Sony and ms wont have a problem selling 399 next gen boxes but they may not be able to build enough at the rate that's required. Plus we dont know what's happening with Corona.
but everyone who might know or heard something said it is. and even some said it slightly stronger
