As fun as it might be for fans to pitch conspiracy theories about how Microsoft and Sony are in a game of cat-and-mouse regarding next-gen console pricing, the reality may be a bit blander.
According to a report from Bloomberg Technology, the recent rumors about Sony waiting until Microsoft announces its Xbox Series X pricing may have little to do with nefarious one-upmanship and more do to with the company struggling to source parts at a reasonable price.
Scarce components have pushed the manufacturing costs for Sony Corp.’s next PlayStation to around $450 per unit, forcing a difficult price-setting decision in its battle with Microsoft Corp., according to people with knowledge of the matter.
Sony’s biggest pricing issues comes as the company attempts to procure a sustainable supply of memory for the console, specifically NAND and DRAM components. Unfortunately, for console makers, not only are high-end laptops encroaching on memory demand, but companies such as Samsung are putting in massive orders of RAM requests for their flagship phones.
Individuals familiar with the matter have voiced dueling opinions on whether or not Sony should attempt to undercut Microsoft again this console generation. Game staff within Sony have pitched the position that “it should sell the new console at a loss if necessary to match Microsoft’s price,” meanwhile other Sony executives would “prefer to make money,” as it did the last generation, right off the bat.
While component sourcing and price management isn’t unique to Sony this time around, there are some things the company is splurging on that may have its PS5 production in a bit more of a bind than Microsoft’s Xbox Series X. This time around Sony is opting for a more elaborate cooling system that is “unusually” pricer at a few dollars per unit rather than the under one dollar price from prior productions. Sony is also looking to release a follow up to its PlayStation VR which may also eat into component pricing with both products being in the market at roughly the same time.
Regardless of the component issue, Sony is scheduled to release some sort of guidance on its games division to board members sometime around the end of April, which will presumably include revenue based on pricing and sunk-costs calculations. On the other side of the globe, Microsoft is expected to do an official unveiling of the Xbox Series X at E3 2020 in June and fans should expect to see prices listed during the event.
With two months between Sony’s gaming guidance and Microsoft’s expected price reveal, the PlayStation team will have its work cut out for itself as it attempts to balance the bill of materials alongside the number of units produced, all while trying to be competitive with whatever price Microsoft throws against the wall.