You’ve all forgotten one very real possibility, which is that Sony pulls a Sony and launches the digital-only PS5 at $599 and the optical-drive model at $649 or higher.
I feel like Microsoft has the most to lose here, given that they were behind in the current generation and they’ve got the slightly more powerful machine next gen that likely will cost more to produce. If I were them, I’d just wait it out. Wait for Sony to announce their price, and then price yours based on that. If you can’t afford to be lower than them (which is likely, given their higher cost), just match them. If Sony prices it high enough that you CAN afford to be lower than them, go lower and have the potential to really do much better next generation compared to the current one. But what they can’t do is announce the price first and then have Sony undercut them again.
Yes, that makes the most sense to me. It’s pretty much Sony’s ballgame with console releases, they could probably name their price and people would go for it. MS can’t do the same. So either they wait out Sony and price below, or go balls out and price aggressively before Sony can beat them to it. And while I could see the two consoles releasing at very similar prices, I’d be really surprised if MS lets Sony undercut them a second time. They just have more to lose.
Well also don’t forget capacity; it doesn’t do any good to undercut and win the market if you haven’t enough product to sell.
That MS (if i recall) announced that they were going to have a constrained supply of (X) this Holiday season shows that it won’t just be a winning point on the demand curve.
I don’t believe that really changes the pricing relationship between the PS5 and Xbox Series X at release. They both may adjust pricing to account for that, but I still think they’re both going to end up being really close to each other regardless. Just my opinion, of course.
The one thing I’d like to see is both consoles adopting more inputs on the standard gamepad. I think fancy gamepads have additional triggers. If something like that came as standard, we’d have at least the option of richer interaction without tying our fingers in knots or punching our horses.
I lay that mostly on Rockstar. There’s plenty of games that have more complex inputs than Read Dead where they don’t tie your controller in knots.
I expect something like this:
$50-100$ difference between PS5 and Xbox many Xs. $50 is a difference both can live with - $100 is a pricewar.
$50 difference for disk/non-disk. Why undercut themselves? It’s only going to be $100 cheaper, again, in a pricewar.
Xbox low fi X version ~ ~$300.
I think Deadline has a point. They can choose a price point where the digital edition is slightly below cost and the regular edition is intentionally sold at a larger price differential, and at a profit. It both emphasises the value of the digital edition, and increases the average sale price.
We heard estimates that build cost for the PS5 was about $460 earlier this year. So they can do the digital version at $399 at a $50 or so loss and the disc version at $499 at a small profit.
Assuming they don’t give retailers any margin at all.
Isn’t the item itself typically sold with low (no) margin, and the profit made on the add-ons (i.e., the discs, extra controllers, and the like)? Why would this be any different?
There is a difference between low margin and neither the manufacturer nor retailers making any money.
That said, it does seem like the PS3 was sold at a loss.
The more I read the conjecture in this thread, the less I know what to expect. I am still hoping for $549 for both systems.
Sony doesn’t do subsidies anymore. They stopped with the PS4. Its always sold at least at cost.
At PS4 launch Sony said it was sold at a loss, but calibrated such that the margin from other initial purchases (plus, a couple of games) would cover it.
I dunno about the cost estimates. I’ve seen claims that Sony initially lost over $100 on each PS3 at launch. That seems insane, but apparently the costs related to the Cell architecture dropped quickly over the following months.
I guess my take comes from the “after you Gaston” stuff on picking an MSRP between Sony and Microsoft. If they wanted their flagships to launch at $500, I don’t understand why they would be so hesitant. Adjusted for inflation, the PS2 launched at just over $500 and it did great numbers. Other successful consoles have launched for nearly that much.
So my uninformed guess is that both companies really, really want to launch their flagships at either $550 or $600. Too much red ink at $500. But the only thing worse than red ink is getting undercut by the other guy saying “$499!”
It’s no wonder Nintendo cannot play this game any more, apples to apples. Their revenue is a pittance compared to Sony, an insignificance compared to Microsoft.
Yes, that is the game of chicken we’ve been referring to.
Rumors about Lockhart seem to be around a lower GPU performance (as well as memory). I wonder if this is an attempt at a cost competitive advantage against the PS5 to take advantage of binning.
Nintendo never played that game. They’ve always treated their console more like toys, and they have an advantage that neither Sony nor Microsoft have: even without a single third-party game, their first-party titles can keep them profitable for a console cycle.
I mean look at the Wii. They could have over-engineered their motion controls and made them super precise, thrown in a high-powered GPU, and upped the production value on the console itself, then sold it at $399. But they’d never dream of trying to sell a console at that high a price, so they bring their costs down accordingly.
Microsoft was selling the Xbox One X for $499 until this year. Granted, not a stellar success - but it showed Microsoft could still build a great console. I don’t think that a $500 base price point is the issue, but rather “how much more than $500 can we get?”
Comments from Microsoft suggest they value Game Pass memberships very highly. That can change the initial system sales economics significantly. I suspect Microsoft will undercut Sony by $50 and include 1 month of Game Pass Ultimate plus another 3 months as a “Day One” bundle. This adds $60 of value to the package and lets them brag about how many games - especially first party AAA titles - you can play immediately for free. Microsoft can then drop the Ultimate to just 1 month in 2021 to reduce their cost without it being a big headline.
Best of all for Microsoft is Sony doesn’t seem to have a good answer to this currently. PlayStation Now could be, but Sony’s made no moves in that direction so far. It started as an answer to PS3 backward compatibility after all.
That’s what I referenced earlier about including $60 of store credit to provide more value but you’re right, they would do it as months of game pass instead.