Digital Foundry suspect next-gen consoles will cost $600

Mr_Mondee · Aug 13, 2020

Any reasons why we expect the Series X to be cheaper than PS5?

I haven't kept up to date but i thought It was widely known that it is more expensive to manufacturer and unless Microsoft is prepared to take some heavy losses, i cannot see it. We are heading towards a economic meltdown never seen before and i doubt even Microsoft wants to take such huge gambles.

Regardless i still think both consoles are going to be in the 500-600$ bracket.

Carlius · Aug 13, 2020

Kirudo said:
Good bye next gen in Latin America

hahaha seriously...in argentina a launch ps4 is like 500 bucks lmao

DJ88 · Aug 13, 2020

I love how certain some people here are despite not having any actual idea outside of some gut instinct.

Just because Sony bombed hard with the PS3 price point 14 years ago doesn't make $600 some forbidden, unthinkable price tag for eternity.

But no matter how much I think the signs point towards a higher cost, I can easily see either one of them being extremely aggressive with price as a possibility as well.

I'm just always baffled by people's staunch refusal to believe anything other than their perceived outcome is possible. Especially after we've seen countless people eat crow on these kinds of predictions before.

exodus · Aug 13, 2020

$600 minimum, I think. I wouldn't be surprised if it was $700.

soundtrack · Aug 13, 2020

The main point is Sony & MS not revealing their prices this close is probably a sign of bad news (more expensive than last gen). Personally I don't think either will go for $600, even if they have to take a loss.

kamineko · Aug 13, 2020

i feel like they may still be deciding

the hardware is the least profitable part of their businesses, isn't it? the money is elsewhere. just have to get people in the door

Dyno · Aug 13, 2020

Manmademan said:
The takeaway isn't that the price of the PS5 at $599 is unrealistic for where Sony will be selling the system, the takeaway is that your rent price is.

But thats the local rent prices? There's a lot of parts of the UK at least where rent prices won't be far off that mark. I don't get how that can be unrealistic when its the reality. It sounds like people are saying low income areas dont count but they still have a lot of customers there too when the price is manageable.

Garrett 2U · Aug 13, 2020

jroc74 said:
I see.

Things must have changed since then with Sony upping PS5 production:

Sony is increasing production of PS5 hardware units by 50% (expects 10m units made by December, may still be limited by shipping constraints)

Source with more at the link: https://asia.nikkei.com/Business/Technology/Facebook-and-Sony-ramp-up-output-of-gaming-devices The rest of the article mainly talks about Oculus and the VR market. Update:

www.resetera.com

549 would be an absolute max. Or component prices are even higher than imagined.

499 is more expensive than 399.

I don't think the price has changed at all. The article directly associates the increase in production to the increased demand for gaming due to COVID-19 and a possible second wave of the virus.

Manmademan · Aug 13, 2020

Dyno said:
But thats the local rent prices? There's a lot of parts of the UK at least where rent prices won't be far off that mark. I don't get how that can be unrealistic when its the reality. It sounds like people are saying low income areas dont count but they still have a lot of customers there too when the price is manageable.

Your local rent prices don't matter. Median rents for the entire territory do.

What is the average rental value in the UK?

For July 2020 the data shows that the average rental price for a new tenancy in the UK was £965 per calendar month (pcm), which is up by 0.6% on last year.

Rental Index

Updated monthly, the HomeLet Rental Index provides the latest view on average rent values in the UK.

homelet.co.uk

If that's correct, the average rent for the UK is 965 pounds per month, or $1295 US. Which isn't far off from the median US rental price of about $1100 last year. Exactly like I told you.

So...we good here?

Dyno · Aug 13, 2020

Manmademan said:
Your local rent prices don't matter. Median rents for the entire territory do.

Rental Index

Updated monthly, the HomeLet Rental Index provides the latest view on average rent values in the UK.

homelet.co.uk

If that's correct, the average rent for the UK is 965 pounds per month, or $1295 US. Which isn't far off from the median US rental price of about $1100 last year. Exactly like I told you.

So...we good here?

Yes. You've clarified exactly what I expected. Low income areas aren't of interest to you. That median is great if you're on it. Lots aren't and can't be

Deleted member 35478 · Aug 13, 2020

C J P said:
Agreed. I'm pretty sure Microsoft's pro-consumer shtick is just corporate posturing - it's Microsoft, come on - but it's meant there's a meaningful difference between the two companies that isn't just about who has what exclusives or which machine has marginally better graphics. I'm actually excited to pick up both consoles at this point, and my main question for now is which to get first.

Pretty much, I'm in the same boat. I would be getting both consoles if I didn't have a capable gaming PC already, so for me it's PS5. Regardless, I don't have a dog in this race, just watching and enjoying it all unfold.

Manmademan · Aug 13, 2020

Dyno said:
Yes. You've clarified exactly what I expected. Low income areas aren't of interest to you.

Neither Sony nor Microsoft is going to be targeting the launch of a new console at "low income areas." The idea itself is ridiculous. They aren't even looking at median income for these things. Your new systems are targeted at high income earners with disposable income and price insensitive enthusiast gamers, as new systems always are.

In 2 or 3 years price drops will take it down into the range of the "average" gamer with the typical income. Several years after that when the system is ready to be replaced (as the PS4 is approaching) the system will drop into the affordability range of the low income gamer.

That's not me being mean, this is literally business. You think the new flagship iphone or galaxy phones released every year are marketed to low income areas?

Komo · Aug 13, 2020

Meus Renaissance said:
If they price the cheaper SKU at 499, then the narrative will be PS5 at $499. Just like how the PS3 had a cheaper version that no one seems to remember.

500 is still a lot to buy a console for.

rochellepaws · Aug 13, 2020

The phone comparison is a bit off when a new phone offers its benefits immediately while a games console typically takes 2 years before good games start to release and 4-7 years before the best games arrive.

$600 may not turn people away permanently but it will encourage them to wait when better and/or cheaper hardware refreshes are almost guaranteed in a couple of years. Personally I don't feel I'd miss much of significance spending another couple of years on PS4, Switch and PC.

thecaseace · Aug 13, 2020

PtKid69 said:
Any reasons why we expect the Series X to be cheaper than PS5?

I haven't kept up to date but i thought It was widely known that it is more expensive to manufacturer and unless Microsoft is prepared to take some heavy losses, i cannot see it. We are heading towards a economic meltdown never seen before and i doubt even Microsoft wants to take such huge gambles.

Regardless i still think both consoles are going to be in the 500-600$ bracket.

A couple of hypothetical reasons none with any substance yet:

1. Sony have been rumoured as having supply chain issues that might have increased parts prices.
2. MS is a larger company with potentially more of an ability to take a hit on initial hardware cost. Reports have also suggested MS have a strong desire to undercut Sony.
3. Microsoft are behind Sony competitively if they want to sell hardware they have to make the most daring move, hence people thinking they're more likely to be daring with #2.

At the moment though I believe they're likely to be equal, Sony will move first (there's less pressure on them they'll sell units regardless), then MS will follow (but not at a loss given the current economic uncertainty).

Kadey · Aug 13, 2020

Despite rising costs of everything, game spending is at an all time high. People are basically forced to stay inside and do mostly gaming if not anything else. The pricing that high would justify the amount of time people would have to spend on it. I mean switches are going for $400-$500 right now. Gaming thirst is real.

SharpX68K · Aug 13, 2020

IMO, the only way these consoles would be $600 or more is if they had 24 GB 384-bit GDDR6.

Not a penny more than $499.99 USD.

Deleted member 59126 · Aug 13, 2020

$599 in one of the worst recessions in history....

Manmademan · Aug 13, 2020

rochellepaws said:
The phone comparison is a bit off when a new phone offers its benefits immediately while a games console typically takes 2 years before good games start to release and 4-7 years before the best games arrive.

$600 may not turn people away permanently but it will encourage them to wait when better and/or cheaper hardware refreshes are almost guaranteed in a couple of years. Personally I don't feel I'd miss much of significance spending another couple of years on PS4, Switch and PC.

Not really. Enthusiasts and early adopters buy on "potential" all the time.

The PS2 was notorious for having a pretty weak launch lineup next to the DC. It wasn't until late 2001 when it really got a bunch of titles worth picking up the system for. Adjusted for inflation the PS2 launched at $449.99.

giancarlo123x · Aug 13, 2020

Where do I send the check to

Cronogear · Aug 13, 2020

I can't see Sony doing $599, if only for the unbelievable stigma that price has for them.

Placing my bets on $549, $499 for the digital version.

Iwao · Aug 13, 2020

I understand why they would be skeptical about this, but $600 is an absurd thing to suggest.

They're not going to go from a mass market sweet spot to something that's $200 more expensive than that. Just an extra $100 over the spot is pushing it, but is still the most realistic estimate for both these machines.

Natural Selection · Aug 13, 2020

At that price I'll spend time going through my backlog and let the price drop a little more. There's no rush to play these new games day 1

stefanomusilli96 · Aug 13, 2020

Why else would they wait so long to reveal the price?

Anyway if that's the case I'll just buy a ps4 cheap to play the exclusives and do the same with ps5 in 6-7 years.

Aadiboy · Aug 13, 2020

Unless they're talking Canadian prices, there's no way the PS5 costs that much. Pick two out of $399, $449, and $499, those are the possible prices of the PS5 and PS5 DE.

Sia · Aug 13, 2020

Microsoft overall is a bigger company sure, but their gaming division is half the size of Sony's what makes anyone think that the parent company will want to lose a billion or two for one of their smaller divisions? In fact it should be the opposite, Sony as a whole relies on their gaming division because they are actually the majority of the revenue and profit for them, they cannot afford to have it fail because Sony as a whole could go belly up. Microsoft's games division could completely fail and be unsalvageable but to Microsoft as a whole it would be inconsequential to say the least.

Dyno · Aug 13, 2020

Manmademan said:
Neither Sony nor Microsoft is going to be targeting the launch of a new console at "low income areas." The idea itself is ridiculous. They aren't even looking at median income for these things. Your new systems are targeted at high income earners with disposable income and price insensitive enthusiast gamers, as new systems always are.

In 2 or 3 years price drops will take it down into the range of the "average" gamer with the typical income. Several years after that when the system is ready to be replaced (as the PS4 is approaching) the system will drop into the affordability range of the low income gamer.

That's not me being mean, this is literally business. You think the new flagship iphone or galaxy phones released every year are marketed to low income areas?

Are they marketed at them? No, but you'll see lots of those items find their way into low income areas. Because people in those areas still buy them and in reasonable quantity. Many save for a long time in anticipation of the products, others run it as credit. My whole point was that these people are the ones would feel the sting on that extra 100 more and likely force a delay in purchase. People in high income areas ofc won't be swayed from purchase by 100 difference

professor_t · Aug 13, 2020

Brokenlynx said:
A couple of hypothetical reasons none with any substance yet:

1. Sony have been rumoured as having supply chain issues that might have increased parts prices.
2. MS is a larger company with potentially more of an ability to take a hit on initial hardware cost. Reports have also suggested MS have a strong desire to undercut Sony.
3. Microsoft are behind Sony competitively if they want to sell hardware they have to make the most daring move, hence people thinking they're more likely to be daring with #2.

At the moment though I believe they're likely to be equal, Sony will move first (there's less pressure on them they'll sell units regardless), then MS will follow (but not at a loss given the current economic uncertainty).

To me, the mere existence of the Series S suggests that the best MS will do is match the PS5 in price. However, even that is noteworthy, if rumors are to be believed that the Series X is more expensive to produce. In the light, MS will be taking a bigger loss to maintain price parity, and then will have the cheaper option for more price-sensitive consumers and folks who want to pay less for a "secondary" gaming console.

Manmademan · Aug 13, 2020

Dyno said:
Are they marketed at them? No, but you'll see lots of those items find their way into low income areas. Because people in those areas still buy them and in reasonable quantity. Many save for a long time in anticipation of the products, others run it as credit. My whole point was that these people are the ones would feel the stong on that extra 100 more and likely force a delay in purchase. People in high income areas ofc won't be swayed from purchase by 100 difference

This is irrelevant, since Sony and MS are not marketing their systems to this audience. If they pick them up, great and all but they aren't counting on it and this audience is absolutely not factored into profit targets for these launch systems.

There is a fixed amount of PS5s that can be sold between now and the end of the year. 10 million is all they are able to ship and manufacture and that number won't go up no matter how large the audience is. Sony can sell them all at $500-600 or they can sell them all at $300. Guess which direction they're going to go in? It's not the second one.

This is the last time I'll engage you on this.

svnty6rs3 · Aug 13, 2020

One thing to keep in mind with the $600 price from PS3 is it was alot more outrageous due to the face that its direct competition was priced at $299 for the lower end model and $399 for the main one. If both consoles are in similar ranges this time, the $600 price won't receive the same type of reaction i think.

dbcyber · Aug 13, 2020

So the company that comes out first and confirms $600 will take all the backlash and heat. That explains why neither want to go first.

Crayon · Aug 13, 2020

Uh no. Theres a chance but unlikely. I dont think sonys putting in an order for 9mil $600 ps5s.

Sqrt · Aug 13, 2020

svnty6rs3 said:
One thing to keep in mind with the $600 price from PS3 is it was alot more outrageous due to the face that its direct competition was priced at $299 for the lower end model and $399 for the main one. If both consoles are in similar ranges this time, the $600 price won't receive the same type of reaction i think.

Also, the $399 was offering more impressive games at the time.

Deleted member 29639 · Aug 13, 2020

Can somebody who expects Series X and/or PS5 to launch at $499 (or less) explain why Sony and Microsoft have been so hesitant to reveal pricing? Last generation, Xbox One with Kinect launched at $499. Microsoft could easily spin that price as a huge jump in performance for the same amount of money as 2013.

$599 for the premium models is the only number that makes sense based on how they've addressed the topic. Anything less is wishful thinking from people who desperately don't want them to cost that much.

KamenRiderEra · Aug 13, 2020

I think both will sell at loss, also gambling in the long time profits of the discless SKUs.

BioDigital Jazzman · Aug 13, 2020

Dphex said:
A difference of 50 bucks between PS5 and PS5 DE is unrealistic because people would say "for 50 bucks more i get the disc drive so i will buy this one"

there will be minimum 100 bucks difference, if not more to get people either buying the "cheaper" PS5 (but they will pay more because digital only in the long term) or the higher priced normal PS5.

The Xbox all digital was $50 less than the one S and people still bought both especially during covid

Dyno · Aug 13, 2020

Manmademan said:
This is irrelevant, since Sony and MS are not marketing their systems to this audience. If they pick them up, great and all but they aren't counting on it and this audience is absolutely not factored into profit targets for these launch systems.

There is a fixed amount of PS5s that can be sold between now and the end of the year. 10 million is all they are able to ship and manufacture and that number won't go up no matter how large the audience is. Sony can sell them all at $500-600 or they can sell them all at $300. Guess which direction they're going to go in? It's not the second one.

This is the last time I'll engage you on this.

I dont know where you even pulled that 300 figure from as I was always saying it would be 500. But by all means act like I'm the one being unreasonable here. Sony have said they want the fastest adaption rate they've ever had. To pull that off they have to be targeting a wider market pure and simple. They won't get that at 600.

NoWayOut · Aug 13, 2020

I fully expect both consoles to retail for $599, plus or minus $50. I think MS will keep the SX at full price for the enthusiasts crowd and sell the SS at cost or just below cost, bundling Gamepass as added value. MS see Gamepass as the main source of revenues in the long term. Sony will probably go with $599 for the disc version and $499 for the DE covering the difference from digital sales.

Jingo · Aug 13, 2020

600 hundred dollars its market suicide for the casuals, especially for the parents who buy the consoles for their kids, remember its a 200 hundred dollar increase between this generation and the next.

500 dollars still my guess.

GrinWithoutaKat · Aug 13, 2020

What blows my mind the most is people thinking the series S price will be so low. It's still a 9th gen machine, it's not going to be cheaper than a One X.

Maxflier · Aug 13, 2020

I could see it being $499, but no way they are making the jump from $399 PS4 to $599 PS5.

fiendcode · Aug 13, 2020

My guess is:

$549.99 Xbox Series X
$549.99 PlayStation 5
$499.99 PlayStation 5 Digital Edition
$399.99 Xbox Series S

...

$349.99 Nintendo Switch Plus (2021)

scitek · Aug 13, 2020

I've said for months it'll be Series S $399, PS5 $449 digital/$499 disc, and Series X $599.

I also think the entire concept of the Series S came about so Microsoft can avoid a huge backlash when they announce the price of the Series X.

FarSight XR-20 · Aug 13, 2020

Tap In said:
Yes possibly a reason MS is holding a price reveal is to have a solid All Access payment plan along with Updated GP info to increase the value since All Access includes GP. That would be a sweet deal and would, like a phone, allow people to see how to afford $599. No interest payments helps and if through Amazon it would be easy for most

International plan is a must though for penetration but if smart they will lead with that in marketing and on a loudspeaker at a monthly price.

Good point.

They declared that this would be 'critical' for their launch and that they plan to 'go big' with the program.

"Xbox All Access is going to be critical to both our launch for Xbox Series X as well as just the overall generation," explained Xbox boss Phil Spencer.

"The response that we've seen where we've tested All Access has been great, but as you said, it's been limited in terms of the market. So you're going to see a much broader market and retailer support for All Access.

Speaking with IGN, Xbox boss Phil Spencer stated that with the launch of the Xbox Series X, Microsoft will "go big" with the program.

It's easier to sold and promote a 599 console if you can get it + Gamepass and online for 35 as initial entry price.
If Series S is 399, would be around 27 I guess.

TetraGenesis · Aug 13, 2020

It's not happening, not for PS5 at least. Sony will never touch $599 again. Most would be $549 for the physical edition.

avaya · Aug 13, 2020

John said he had heard rumours, he wasn't 100% sure on it. The only solid BOM estimates we have from Bloomberg and from sell-side indicate $450, that indicates $499 with a drive, $449 without if you follow the PS4 example.

fiendcode · Aug 13, 2020

scitek said:
I've said for months it'll be Series S $399, PS5 $449 digital/$499 disc, and Series X $599.

I also think the entire concept of the Series S came about so Microsoft can avoid a huge backlash when they announce the price of the Series X.

XSX won't be $100 more than PS5. Either version of PS5 honestly.

The $100 gap will be between PS5 and XSS. That's actually why it exists.

KingK · Aug 13, 2020

I honestly can't imagine either console being more than $500. I'd almost be willing to bet money on it.

I think $500 is most likely for the PS5, with the digital edition being $400. There is just no way Sony is planning on selling the hardware for a profit. They've never done that at the start of a gen, and digital downloads are bigger than ever.

I'm guessing XSX/XSS follow a similar pricing model, maybe they try to undercut Sony by $50.

Have any console, other than Nintendo, actually made a profit on hardware sales in the first year? My understanding is that Sony and MS both always sell at a loss to start.

KodiakGTS · Aug 13, 2020

scitek said:
I've said for months it'll be Series S $399, PS5 $449 digital/$499 disc, and Series X $599.

I also think the entire concept of the Series S came about so Microsoft can avoid a huge backlash when they announce the price of the Series X.

Not sure I buy that narrative. I truly think they just wanted a more mainstream console to sell gamepass subs. I would counter that the entire concept of the PS5 DE likely came about to try and close the price gap once Sony heard inklings of XSS. XSS is rumored to be a different APU, different ram configuration, different form factor, no disk drive, different target output than the XSX. PS5 DE is identical components to PS5 with minor form factor changes due to the disk being removed. One certainly feels much more labor and planning intensive than the other.

Skeff · Aug 13, 2020

The Dark Shape said:
Can somebody who expects Series X and/or PS5 to launch at $499 (or less) explain why Sony and Microsoft have been so hesitant to reveal pricing? Last generation, Xbox One with Kinect launched at $499. Microsoft could easily spin that price as a huge jump in performance for the same amount of money as 2013.

$599 for the premium models is the only number that makes sense based on how they've addressed the topic. Anything less is wishful thinking from people who desperately don't want them to cost that much.

My personal theory for this is one of or a combination of the following reasons:

#1 they are confident they are cheaper than the competition and want to reveal second or at least near the competitor to push any negative high price discussion onto competitor. E.g 449 is cheaper than 499.

#2 they want to show more before they give you the price they want to be 100% sure of the line up and be able to demonstrate the value by showing you everything you can get for that price.

#3 they may just both have great prices and marketing have decided they want to save it for a big punch 8 weeks before launch to really whip people up into a frenzy.

#4 they could potentially think that asking people to pay for a new console even if as low as 299 would be in bad taste during covid so are hoping we get a financial recovery somewhat so it is less tone deaf?

#5 another reason that their marketing teams have come up with that I, a simple armchair analyst, cannot think of.

Digital Foundry suspect next-gen consoles will cost $600

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