Why? I mean there’s precedent that we’d know, but why is it so important to know 4-5 months in advance?
Also, regarding Lockheart, we don’t know that they still plan to launch a second console, or when.
It would make just as much sense to wait 3-6 months after the launch of the Series X to launch a lower-priced SKU.
I don’t even think they know yet what to launch at. The future is so uncertain and too high will potentially kill a machine before it ships. They’ve got to start weighing the ability to reduce costs even before it hits the shelves because that will likely happen… but with the world so uncertain right now, maybe it won’t? What do you do then if you priced too low? Jack it up?
I think both companies have an idea what they want to charge ($499.99 US) but are still not sure they can do it reasonably, and probably at least one of them is thinking $399.99 would be waaaaay better if they can swing it.
If that happened, imagine this scenario.
PS5 full fat: $599
PS5 diet: $399
XSX: $599
Now if Sony prices the PS5 lite at $549 it’s no problemo. Maybe even $499 with $60 in store credit. Question is whether they’re playing hardball.
Yeah, a potentially awkward position, but from what I understand the Lockheart SKU is different in its offering than the PS5 digital edition. It’s significantly less powerful and the positioning is based on people understanding the Series X first.
And again, this is assuming they’re still going to make it. There was a rumor about multiple SKUs for the Xbox One at launch as well.
Yes, and that is where Sony’s opportunity lies. If they price the PS5 lite competitively with the Lockhart, even if it’s $100 more expensive, they win-- because the PS5 lite is a real PS5 in all ways other than not having a blu-ray drive.
And yet Lockhart is Microsoft’s only play, unless they have a digital-only XSX in the wings. Either they release Lockhart and mandate all XSX games play on it at reduced settings, or they heavily subsidize the XSX so it’s the same price as the PS5 lite.
Of course it’s possible Sony doesn’t have the balls to enter this fight and price the digital-only edition $50 less than the full PS5, and it won’t be an issue. This is all just speculation.
My speculation…
I don’t think console manufacturers care about their competitors as much as is being suggested here. Certainly not to the extent that Microsoft have a console designed that they may or may not release depending on what Sony does.
You are super duper wrong. The $100 price difference at the launch of the current gen killed Xbox One and both MS and Sony know it.
Here’s all you need to know:
Mixture of markedly poorer performance, disastrous marketing focused on streaming, and price. But yeah price was the big one.
Rumor that Lockhart will be unveiled in August.
Microsoft will have a big hill to climb compared to Sony, as you note.
Perhaps they’re counting on being able to price the Series S significantly lower than what Sony could get away with. For example, what if it’s:
PS5 - $599
PS5 digital - $499
Xbox Series X - $599
Xbox Series S - $299 (or $399)
I think it’d have to be that significant for them to have a clear value proposition for players looking for a lower-cost option.
That’s basically impossible. The estimates are that they’ll save about $20 on the bill of materials. Anything beyond that would have to come from Sony subsidizing the digital edition more than the normal, based on them making more money from digital sales than physical ones. That’s about $8 per game. The average console user buys about 2 games per year. There is no way they can recoup an extra $180 of subsidies from that. They probably can’t even recoup an extra $80.
I think Sony is slowly priming people for a higher price, e.g. “value creation” and so on and so forth. Given that the Blu-ray drive is not a huuuuuge cost factor, I find it unlikely that there’ll be a $399 sku.
Isn’t there licensing to be paid for the physical drive as well?
Judging by how MS handled the X, I don’t think so. They made you download the Blu-Ray app to reduce licensing fees, so (other than chips etc which are built into the hardware cost) the licensing is based on active users rather than the actual hardware. Of course, Sony may not have the same licensing setup.
This is my guess if neither company blinks.
If the flagships are $499, there will be rejoicing and red ink.
Yes, if you include a drive, you have the physical cost of the drive itself, licensing for blu-ray, you make more money per game selling digitally, and of course you enable the used games market to exist so you get less sales overall as each game can be played by multiple people.
If the PS5 digital is $100 cheaper than the XBX, Sony’s going to obliterate MS.
The Blu-ray licensing fee is ~$10. That still puts the difference between the two at most $30 total. The price isn’t going to be anything more than maybe $50 at most then cause Sony isn’t going to eat a bunch of money per system ever again. So as stated above already its why they are pushing the “value” word around. These are going to be expensive machines. The hardware dictates that.
I just want them to let me pre-order the damn thing already.
timestamp 4:18 if it doesn’t go there automatically.
We’ll see, but the cost of the blu-ray drive isn’t the only calculation. Let’s pretend Sony has tons of data about how many games the average PlayStation owner buys over the lifetime of a console generation (which they do have, of course). Let’s pretend that number is…11. I have no idea if that’s the number, but let’s pretend it is.
Typically Sony gets about $7 in licensing fees for every game sold. But for Digital Edition sales, they will probably get the normal digital cut these days of 30%, which will generally be $18 ($60x30%). That means Sony makes $11 more per game for every Digital Edition buyer, and that means over the lifetime of the console they will make $121 more on average.
That means they can charge $100 less than the normal edition and still come out on top.
Possibly over the course of the entire lifetime. Which is absolutely awful economics. “Hey we might make our money back 6-7 years from now”…Sony can’t do that.
I think you’re wrong, but none of us know anything. The Digital Edition has no reason to exist if it’s only $50 less than the standard version. Just from a marketing point of view, it needs to be $100 less to make sense.
