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Uncertainty around the Playstation 5 price

With DRAM and NAND flash memory being scarce, Sony is facing issues with pricing its new PS5 console.

An apparent problem of scarcity for DRAM and NAND flash memory is impacting the price at which Sony is able to buy components for its new PlayStation 5 console. As a result, the cost Sony might be incurring to produce a PS5 may be as high as $450 per console.

This has put Sony in an awkward position. This time round, they will have to use a ‘wait and see’ approach when determining the price of the console. With mass production starting in spring for previous consoles, its interesting to see how long Sony will be able to wait in order to ascertain the real cost of producing the console.

IGN have claimed that Sony might onsider selling the PS5 at a loss. This would be a possibility where the cost of components remains high. Sony would make this move in order to be able to compete with the Xbox Series X.

Sony might be selling the PS5 at break-even or at a loss.

Should Sony not be able to reduce the cost per unit and sell at a loss, it might be possible that they will try to re-negotiate the pricing of its components in the longer term. This would ensure that the cost per unit is decreased over time, enabling Sony to return a profit on the console.

It might be possible that Sony sells the console at a slight loss or at breakeven. This would still make sense for the company, as they can still focus on making money from the services offered, such as PlayStation Plus and PlayStation Now.

From what we’ve seen so far, Sony is taking a more cautious approach this time round, released details on the new console bit-by-bit.