The bean counters have definitely discussed the impact of the Xbox Series prices. I mean Jeff Grubb has stated MS is losing more money than you think on the Series S and that thing is cheaper in every way compared to the PS5, so if Sony does price the DE at $399 then it will have significant impact on Sony, so the decision will not be taken lightly.
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It is RDNA2 but full or just one feat to make it able to call it rdna 2 and to which extent and which featuresā¦?
Guess weāll see in the tear down and Sony know we are waiting after them for that we didnāt forget anythingā¦
Should be relatively easy to see if Sonyās announced price has changed downwards, PS HW is a major factor in their earnings in launch period, so keep an eye out for a revised earnings report with next financials. If they had to eat a larger loss than planned it will show up at some point.
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While I agree with Ed here about Sony taking the hit, I think it will be a bigger decision taken by the CEO of Sony and not left to Jim Ryan.
When dealing with big companies like Sony, Offset return to profit and reliance on services income to help bring profit is a very touchy subject. Not due to fear that they may lose their impressive subscriber base for PS Plus but that operating profit is used to help subsidize losses recorded over the last three years from the home entertainment and mobile divisions.
So, away from the CEO being responsible for making sure that the stockholders and board are happy, You have to take the potential $399 price situation and look at it like this.
Say for argument, The PS5 DE costs $ 499 to break even and they sell it for $399. How do you make up the difference and how long does it take?
So my hypothetical PS5 DE purchaser has the console. They buy PS Plus for a year. So that is $59.95. so cut the costs out of that for operation (guesstimate) is $50. So there is $10 towards the $100 loss.
Now, the cut that Sony gets from each digital sale of a game is 30%. 30% of a $60 USD game is $18. 5 games sold digitally is $ 90 worth of royalty payments to Sony. So then the $100 cut to the price is covered by additional revenue earnings. This could easily be inside a year.
However We then have to count in shipping, additional packaging, marketing, taxes, tarrifs and currency conversion. These costs can be only a few dollars per unit but it all adds up.
The real test will be when Sony talks more about the console and what they offer. If they continue with discussing bringing people across to PS5 quickly, I think they will go for $399 - $450. If they propose or target messaging around how they have the best games and that nobody makes games as good as Sony, I think they will go for $499 for digital and $ 549 for Standard.
Positioning and talking points from the CEO and CFO of Sony point towards āGenerating a high social value and maintain a high level of profitā It is on page 26 if you want the info. This points, in my mind, to a target where the console breaks even on costs for development and manufacture when Covid 19 has reduced some of the potential market for their other departments.
It ultimately will all come out and I believe Sory have faith in the Playstation brand bringing success again, no matter if the plan is to offset loss for long term market dominance.
Xbox Series is N7e and not N7+ either I donāt think that is any indication whatsoever. I also believe N7+ is quite dead. Even the Nvidia A100 GPU is rumored to be on a mobile process. But Iām not 100% sure
We got a bingo here. That forecast is also the reason, why itās $499 at least right now.
N7+ is N7 enhanced
Where do you get that from?
Q: TSMC 7nm enhanced, is it N7P, N7+, or something else? A: Itās not base 7nm, itās progressed over time. Lots of work between AMD and TSMC to hit our targets and what we needed
AFIK they donāt use any EUV like N7+ does
That is correct. The process used with the Xbox Series is not N7+ which (or is rumored to) make use of EUV. The process is called N7e and it is unclear what the differences are to the other known process types. But one for sure it introduces are more dense silicon than for example N7 or N7P (which are the base for the existing PC GPUs).
Im very confident PS5de will be $399.
It should be Ā£349, but maybe sony wont want to take as big of a hit in the UK, the currency exchange rate would make more sense for the PS5de to be Ā£379, like how the switch was Ā£279.
They could do $449 for the de, but I dont think they will want to take the risk.
Even the de being $399 is not perfect though, while people like us know its very good value considering the hardware, the more wider customer base may not be to keen on spending that much for a digital only. $299 for a digital only is a lot more attractive because its such a low price.
Sony is in a very interesting position here on pricing, as going to $399 on the PS5DE almost assuredly means that they canāt do any further price reductions or sales for a very long time after launch because they would likely be taking a very large loss to do this. There were some rumors way back that Xbox was even targeting $249 at one point for the Xbox Series S, so while I doubt that they immediately drop the price at launch I think that they would be more willing to have it be priced at $249 at various points during sales or promotions which suddenly makes that gap $150 again instead of $100.
While my current guess and many others is $499 PS5 disc and $399 PS5DE, that also is a little odd in terms of making your customers pay a $100 premium just to have a disc drive considering that all of their other consoles have had them prior to this generation. Of course, we all know that a reason for the digital is to keep more money in their ecosystem, but consumers donāt care about that side of things. Xbox has a clear consumer message between their 2 choices, cheaper and less overall power versus the most powerful next general console across the board.
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My guess is they know the market will wait for them. They donāt have to react and they will do their event whenever it was planned and add the price and release date then. Sony doesnāt generally respond until they want to. I also think the price leaks for Xbox are going to hurt Xbox in the end. If it is true that Sony had been priced much higher as was rumored then the leaks and allowing Sony to price adjust will hurt MS. End of the day though, I expect $400/$500 for PS5 but thatās just what Iām guessing. Definitely not married and could see it go higher.
Iām really expecting $450/$500 or even $500/$550 for the PS5. $400 just strikes me as extremely optimistic for any version of the PS5.
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Yeah. That thought crossed my mind yesterday that if Sony goes $399 it probably rules out price cuts for a good number of years, even a slim model might only put them in a position where they no longer lose money on the console, but will not allow them to sell the console at a cheaper price without incurring loses again.
Saw this tweet. It seems that either Mediamarkt knows more, or they are just speculating. Somehow I just donāt see them cutting 100 euros off of the DE because no disc drive. Unless they just take a big loss on it. And I wonder what this could mean for MSās plan with XSS, because for people that have no console preference ā¦they will likely spend 100 bucks more.
MS really did put Sony in a tough spot. On one hand Sony may want to price the PS5 lower to keep up with MS in the media as far as value, but on they other hand they donāt have to. If they price the PS5 normally they are still going to sell all of them anyway. Those things will be sold out past Christmas, and if priced higher they always have room for a price drop later if sales slow down. So the only reason Sony would price this thing lower is for marketing/image, when they already have a pretty loyal fanbase.
Iām thinking it may be better for Sony to price higher in the major markets and lower in those markets where consoles are normally very expensive.
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Sony will go with $450/$500 or $500/$550. No on wants to pay $100 for a blue ray drive.
Donāt forget that itās possible Sony wants to sit very close to XSS and might make the DE 399. They would take a loss I guess but it will also sell like hotcakes Iām sure.
Letās hope youāre right, as that would be best for consumers like me who would use it as a secondary console.
Absolutely , itās great for our wallets. But I canāt imagine that MS will be happy about it. DE would only be 100 bucks more than the XSS then. At the same time itās also something MS could have anticipated .
I bet that if PS5 DE is 150 bucks moreā¦XSS will sell a lot more compared to if DE is only 100 bucks more.
Sony has to match the price of the Series X at least now. That trick Superfast SSD is expensive though.