Playstation 5 vs PS5 digital edition: a Cheaper Price for a Diskless Machine?

[Nuclear Muffin]

A difference of less than $100 makes no sense from a value perspective. That was the difference in price between the PS3 models on launch and I expect Sony to do the same here. Nobody will bite at a mere $50 difference and Sony know this.

They will take a bath on the hardware price in the short-term in order to push people towards the PSN store as their only option; and make much more money in the long-term.

 

[mullah88]

399 is important to Sony, I think they'll have a 399 sku

 

[Shambala]

Starting from $399 guaranteed. No way Sony is missing out on that price point. They make way too much from PSN store to worry about a loss on hardware.

 

[ascii42]

I wonder if you can just plug a USB Bluray drive into the diskless version down the road....

SOmething like this

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I assume it'd have to be a UHD Blu-Ray drive. I doubt they'll support it, but you never know.

 

[LeMillion]

Great analysis, especially for the details that some people might not think of.

My biggest takeaways:

- Removing the disc drive might only save around $20 on BOM
- Savings would mainly come from digital customers earning Sony more profit per game purchased.
- Digital SKU having more storage for the same price as disc-based is an option, but runs the risk of making disc-based console look "inferior"

Personally, I'm expecting a price difference between the two but I'm not convinced of the range yet. $50 seems like the logical lowball choice, but part of me thinks Sony might go big with a $100 difference.

 

[Strangelove_77]

Thatd be great.

 

[Deleted member 30681]

What percentage do retailers take from physical sales for first party games? that video seemed to only touch on third party digital titles. my understanding is that a place like game stop get's 30% on all new game sales where as Sony would get 100% from a first part digital game sale. in which case they'd be making more than just $8 more on digital sales vs physical. it would be closer to $18? $100 difference would be eating $80 but they'd make that back after like 4 first party titles which seems reasonable to expect, not to mention they probably have statistics that show how many digital titles people buy on average.

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I'm not sure if what's in this is still true (it seems kinda old), but I've seen it shared a couple times.

Great analysis, especially for the details that some people might not think of.

My biggest takeaways:

- Removing the disc drive might only save around $20 on BOM
- Savings would mainly come from digital customers earning Sony more profit per game purchased.
- Digital SKU having more storage for the same price as disc-based is an option, but runs the risk of making disc-based console look "inferior"

Personally, I'm expecting a price difference between the two but I'm not convinced of the range yet. $50 seems like the logical lowball choice, but part of me thinks Sony might go big with a $100 difference.

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Said this earlier, but I think Jim Ryan has already ruled this out as a possibility. He confirmed that everything else in the machine is identical. They'd have to either go cheaper or bundle something in to have the same price.

 

[Belthazar90]

I don't see how a $50 difference makes sense from a business point of view. They're clearly trying to lock people into only buying from PSN so taking the hit and making it $100 less would make a lot more sense (I would only consider the digital edition if the difference is at least $100)

 

[Babadook]

I'm still going with $399 and $449

 

[LeMillion]

Said this earlier, but I think Jim Ryan has already ruled this out as a possibility. He confirmed that everything else in the machine is identical. They'd have to either go cheaper or bundle something in to have the same price.

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Oh nice, thanks for pointing that out! Seems like a bigger SSD is out of the question then.

 

[shoemasta]

$50 makes a certain amount of sense. Though I wouldn't be too shocked if it was $100.

Either way, 50 or 100, the utility of having a disc drive for BC, Blu-Ray, and more flexibility in media options outweighs the extra cost for me.

 

[Tyaren]

and i still say it will be 499 for the digital and 599 for the disc version

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Sony trying another 600 bucks console and out of all times in a year like 2020? :/

I think it'll be more like 449 bucks for the digital only PS5, 499 bucks for physical.

 

[Sheng Long]

Haven't had a chance to watch yet so sorry if this was answered.

Dark1x

Did DF go into the cost of licensing the various media the drive would also save on? DVD, BD, UHD are all licensed formats. It's why they omitted CD playback on PS4 too, one less thing to pay for even if the cost per unit is small. I don't know what the costs would be for Sony on a massive scale but it is an added cost when you include a drive that plays several formats. Unless that is included in that $20 estimate.

Nintendo never payed for the license. MS made you pay for the license on original Xbox with that remote.

 

[2Blackcats]

Noob question.

Will the PS5 be better at playing uhd movies then the One X or is there not much difference when it comes to players?

 

[Thatguy]

I know Sony hasn't explicitly announced it but in interviews they have hinted at the capability of a consoleless option. Basically PS Now, except you can play all PSN purchases on it. I would assume PS Now would be upgraded to 1080p and eventually 4K. The PS Now infrastructure is old at this point and it just makes sense that they would investing in gen 2. Actually, it makes a TON of sense.

Heres the spec I could see them targeting:

$10/month or $100/year (online multiplayer included, PS+ required for 'free' games included too...or they might include everything PS+ gives you with the sub)
1080p at launch and 4K eventually
Very low lag under most broadband internet scenarios YMMV though
ALL PSN purchases playable day 1, plus the PS Now catalog
BC across all generations
Compatible with DS4 or Dual Sense controller (which is Wi-fi enabled, but they can't reveal that until gen 2 PS Now unveil) and a variety of internet connected devices including PS4, PS5, PC, and a new PS TV device (no Vita internals) that retails at $150 with a Dual sense included.
Unveiled shortly before console launch in order to maximize disc based retail preorders. Some will stick with all physical because of 4K, lag, play off the grid, etc

This makes more money for Sony. Here's why:

• So many still have day 1 PS4s running just fine. Its going to be 7 years on from PS4. Under the old model they got $400 from that customer. Under this model they get $700 over the course of that time, which beats inflation by quite a bit.
• More people 'in platform'. Sony makes money on game royalties, not hardware. This allows a far broader audience to buy PS5 games even if they don't own the console box.
• No install base manufacturing constraints to game sales
• no game trading or used sales which Sony gets no cut on

It's also good for consumers

• Very low cost of entry
• Sub and unsub as you please (Sony will sell the annual sub cheaper though...they don't want you doing this)
• no fan noise/heat/electric bill from a console
• play on more devices, some TVs would have the service baked in
• mid-gen spec upgrade baked in
• Full BC
• New game types possible with more players connected

THIS will be the real discussion late this year. But you want the console box if you're in to VR and I bet 4K isn't there at first. Also retail used games and game trading won't be a thing on this or the digital version.

 

[halfjoey]

Didn't MS only drop their digital only One S by $50 when it released?

I'll most likely get the disc version for used game purchases, UHD movies, and backward compatibility reasons.

 

[Fisty]

It absolutely has to be a $100 difference or this would be the most baffling hardware decision in awhile.

The cost of a UHD drive being $20 is almost irrelevant in this equation. Sony isn't just locking you in to digital for just the PS5, its also guaranteed sales for PS4 digital games. If the consumer already has a big digital PS4 backlog, then Sony has already locked in a top-priority consumer and they can eat the $100 no problem, after all their stated plan is to transition their users as fast as possible. If they arent yet a digital PS consumer, locking them into gen 9 will see returns eventually as Sony is pretty much guaranteed to be able to sell 4-5 new games to an active user across the gen, or at the very least rake in the V-Bucks royalties. Even if they are hypothetically losing ~80 bucks per digital PS5, they are EASILY making that money back in no time (or they already have).

If the Digital Edition hits $399.... thats the magic number

 

[Plidex]

IMO people that believe the difference will be USD 100 are overestimating the amount of games the average user buys. If it's USD 100 it's because Sony is upping the price of the disk version, instead of making the digital one cheaper.

 

[Yerffej]

Noob question.

Will the PS5 be better at playing uhd movies then the One X or is there not much difference when it comes to players?

Click to shrink...

It wil be the same. Sony never even had a proper 4k UHD player in their Pro which boggles my mind. Both consoles will be on even footing this gen in that regard.

 

[Radnom]

Where I live, PS4 games are nearly 40% more expensive on the PS store than their physical counterparts. That's at launch- physical second hand copies get even cheaper. So buying a digital-only PS5 seems absolutely insane to me. It could be literally free and still over the course of the generation it would cost me more money than the PS5 with a drive lol.
On top of all the backwards compatibility, watching blu-rays, etc.

 

[FTF]

Prepare to be surprised then, as if there is only 50 bucks difference, would make no sense business wise.

and i still say it will be 499 for the digital and 599 for the disc version

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I also agree there'll be a $100 difference between the two. Still saying $399 and $499.

 

[Nuclear Muffin]

Haven't had a chance to watch yet so sorry if this was answered.

Dark1x

Did DF go into the cost of licensing the various media the drive would also save on? DVD, BD, UHD are all licensed formats. It's why they omitted CD playback on PS4 too, one less thing to pay for even if the cost per unit is small. I don't know what the costs would be for Sony on a massive scale but it is an added cost when you include a drive that plays several formats. Unless that is included in that $20 estimate.

Nintendo never payed for the license. MS made you pay for the license on original Xbox with that remote.

Click to shrink...

Sony own the Blu-ray format and lead the BD Consortium (they're also part of the DVD Consortium); so they wouldn't need to pay licensing costs regardless.

 

[Colors]

Some interesting points in the video regarding price. Nothing really new that hasn't already been talked about in some way, but a 50 dollar price gap is most likely as far as the difference in price will go.

lock if already posted, but I couldn't find a thread for this.

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And why the digital edition couldn't be a special edition that come with a 1/2/5 year(s) subscription with PSN ? Seems they have a pretty pricey box, so why not going the smartphone way, even for a limited time if necessary, and will say they have the cheaper offer to go nextgen. The gap is going to be as big as necessary to cut the gras under the Xbox.
#boldprediction

 

[The Artisan]

The only way I see a $50 gap if it's $349 and $399 for each version. If discless is $399 or more I think the gap will be $100 to give people a reason to buy the disc-less version.

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bro this would be amazing

 

[degauss]

$50 difference and the same SSD I would imagine.

 

[MaulerX]

I also agree there'll be a $100 difference between the two. Still saying $399 and $499.

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If they do that then it's a strategy to get everyone to buy the disc-less version. Making people pay $100 more for the disc drive is a bit of a FU to people who prefer physical media.

 

[FTF]

If they do that then it's a strategy to get everyone to buy the disc-less version. Making people pay $100 more for the disc drive is a bit of a FU to people who prefer physical media.

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I'd still go for the disk version and don't think it's a fu at all...ability to play 4k/Ultra HD blu-rays, physical games and backwards compatibility are worth $100 to me and I think it would still sell more than the digital version.

 

[Deleted member 30681]

And why the digital edition couldn't be a special edition that come with a 1/2/5 year(s) subscription with PSN ? Seems they have a pretty pricey box, so why not going the smartphone way, even for a limited time if necessary, and will say they have the cheaper offer to go nextgen. The gap is going to be as big as necessary to cut the gras under the Xbox.
#boldprediction

Click to shrink...

This is 100% a possibility, and since the size of the SSDs are the same, they could just drop a year of PS+ into the box and sell at the same price. I don't think they'll do more than 1 year though, and I doubt they'll do what MS is doing with the Xbox All Access program.

The only thing I'd argue against this being a possibility, is that Sony is probably counting on PS5 owners to buy and pay for PS+ separately to make up costs.

 

[Sheng Long]

Sony own the Blu-ray format and lead the BD Consortium (they're also part of the DVD Consortium); so they wouldn't need to pay licensing costs regardless.

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They do not own the BD format entirely though. They are simply a part of the BDA which is many many companies.

I know Sony, Phillips and Panasonic created a consolidated way to get CD, DVD, and BD in one license a long time ago, making it easier to get the licensing etc. I don't think it excludes them from any licensing fees though.

 

[Stinky Badger Games]

If you watched the video, that's exactly what Wich said, minus the price estimate for the DE

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Ah OK. Apologies, I'm at work so haven't seen the video yet.

 

[StallionDan]

Disc drive will work out the cheaper purchase in the mid and long run.

 

[onpoint]

PRETTY sure I'll be able to save more than $50-$100 over a few years buying disc games on sale compared to the PS Store's sales.

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Between this and wanting to play DVD/BluRay and the potential (however realistic) of playing old disc games, I think the disc system is the way for me.

 

[AndyD]

He mentions the UHD drive costs ~20$ per unit for sony.
Also that the prices will most likely be 449$ (DE) and 499$ (Standard). Or even 499$ and 549$.

Personally, I would only consider the DE if it was a 100$ difference. If it's 50$ I'll definitely get the standard.

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I thought the software licensing costs to play Bluray and UHD are significant as well, not just the hardware $20. I would be shocked if its only $50 overall, as it's not a sufficient difference. I'd wager it'll be $100 different price if there are zero other differences in packages.

 

[davygee]

PS4 had a BOM of $380 and sold for $399....the PS5 BOM is supposedly $450, so fully expect the PS5 to come in at $449 or $499 but not more. I also believe that the PS5 DE has been created to allow Sony to make a cheaper model to get it close to the $399 mark again.

Saying that, I expect the following:

PS5 - $499 (including 3 FREE months of PS+)
PS5 DE - $399

I fully expect Sony to lose money ($30-$50) with each PS5 DE sale, but will recoup that easily with the sales of digital only games. They will recoup the loss with 4 AAA digital game sales.

 

[Tora]

Ah OK. Apologies, I'm at work so haven't seen the video yet.

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Haha, I was just saying that he was agreeing with you -- Sorry if it came off wrong :)

 

[androvsky]

IMO people that believe the difference will be USD 100 are overestimating the amount of games the average user buys. If it's USD 100 it's because Sony is upping the price of the disk version, instead of making the digital one cheaper.

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I think this is more likely the right way to look at it. If we start out with the assumption that the cost of the disk version is as low as it can go, then there's no room to make the digital version cheaper. Albert Penello has said that consumers tend to value having a disk drive quite a bit more than the actual cost, which we can see in all of these speculation threads (and the Xbox all digital versions) assuming a much larger price gap between the two systems than the price of the parts would justify.

But like you said, if we assume the digital version is the normal, base version of the console, the question then becomes how does Sony add value to the disk version to make it worth $100 more? That's much easier; they've already confirmed UHD blu-ray playback and PS4 BC so people that didn't go all digital immediately will be set (which is probably quite a few given how discs were viewed at the start of this gen). All they'd have to do is add PS1, PS2, and PS3 BC, then set up companies like Limited Run Games that want to do new LEs of classic games so they can press new copies of old games, then I could see Sony getting away with higher price for just an extra $20 in parts. Heck, they could support SACD again for a few more dollars. ;)

The difficult part is if the digital version is the price of an XSX with a disk drive, but I feel that's pretty unlikely.

 

[Dictator]

Haven't had a chance to watch yet so sorry if this was answered.

Dark1x

Did DF go into the cost of licensing the various media the drive would also save on? DVD, BD, UHD are all licensed formats. It's why they omitted CD playback on PS4 too, one less thing to pay for even if the cost per unit is small. I don't know what the costs would be for Sony on a massive scale but it is an added cost when you include a drive that plays several formats. Unless that is included in that $20 estimate.

Nintendo never payed for the license. MS made you pay for the license on original Xbox with that remote.

Click to shrink...

John doesnt post on ResetERA anymore and He did not make this video, Rich did.

 

[RowdyReverb]

IMO people that believe the difference will be USD 100 are overestimating the amount of games the average user buys. If it's USD 100 it's because Sony is upping the price of the disk version, instead of making the digital one cheaper.

Click to shrink...

Especially users who wouldn't splurge to have the more feature-complete model. People who spend more for the disc version are going to have the higher attach rate

 

[Sheng Long]

John doesnt post on ResetERA anymore and He did not make this video, Rich did.

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Mahalo!

I was just looking for his insight. Bummer he doesn't post anymore.

 

[Deleted member 17092]

I expect $449 for digital and $499 for disc version. $499 for xsx as well.

If Lockhart comes in at $299 though I would not be surprised at all to see Sony do $399 for digital. I actually expect some price changes before release for Lockhart and the digital version too depending on who announces price first. Like if MS announces Lockhart at $399 I'd expect Sony to announce $399 for digital ps5, but then MS will cut Lockhart to $299. If Sony announces first at 449 I could MS launching Lockhart at $399, but then Sony matching that and then MS repricing to $299.

 

[Shoichi]

$50 for backwards compatibility with the PS4 is good enough for me to spend $50 extra on. Not including I still like to get discs for movie watching

 

[Segafreak]

I'm expecting both to cost the same price actually.

 

[Manmademan]

IMO people that believe the difference will be USD 100 are overestimating the amount of games the average user buys. If it's USD 100 it's because Sony is upping the price of the disk version, instead of making the digital one cheaper.

Click to shrink...

Yup.

 

[androvsky]

Haven't had a chance to watch yet so sorry if this was answered.

Dark1x

Did DF go into the cost of licensing the various media the drive would also save on? DVD, BD, UHD are all licensed formats. It's why they omitted CD playback on PS4 too, one less thing to pay for even if the cost per unit is small. I don't know what the costs would be for Sony on a massive scale but it is an added cost when you include a drive that plays several formats. Unless that is included in that $20 estimate.

Nintendo never payed for the license. MS made you pay for the license on original Xbox with that remote.

Click to shrink...

Are you sure that's why CD playback was omitted from the PS4? I know it's become the consensus because no one could come up with a better explanation, but it doesn't make much sense. All the CD patents expired long ago and Sony held half of them anyway. All they'd have to license is the Redbook Audio logo, which is dirt cheap afaik and Sony should already have a corporate-wide license anyway. And that's if they felt like licensing the logo, they wouldn't have to.

I think it was more likely that Sony was desperately trying to push their music streaming service when the system launched and didn't want any other method of playing music on the system. Even today, the web browser still doesn't support any audio codecs; only the half-assed Media Player (which users practically had to beg for) exists as an alternative to official streaming services like Spotify. The Plex app doesn't even have access to an audio codec, they have to transcode music into blank video files to play them on the PS4.

 

[SavoyPrime]

I'd rather put that extra 50 to expandable storage. Finally going all digital.

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Same. It's the best time to do it for me since my gaming shelf is full lol

 

[CrispyGamer]

I'd pay $50 for a built-in 4k BD player tbh.

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Exactly lol Jim Ryan mentioned that rather than price he wanted the consumer to think "value" if it's only $50 between the two then how would the digital version show value? It'll be $100 difference with the disc version coming with 3 months of PS+ and the Digital coming with 1 month or 14 days PS+ most likely. The free PS+ games will interesting that month....

 

[nelsonroyale]

I expect at least a $100 difference. I think they will have a subscription model with the digital version or some such. Also, they will probably take a bit of a loss on the digital model. $50 doesn't make much sense on the consumer end. Got to make it attractive, even the digital model won't cheap per se.

 

[Sheng Long]

Are you sure that's why CD playback was omitted from the PS4? I know it's become the consensus because no one could come up with a better explanation, but it doesn't make much sense. All the CD patents expired long ago and Sony held half of them anyway. All they'd have to license is the Redbook Audio logo, which is dirt cheap afaik and Sony should already have a corporate-wide license anyway. And that's if they felt like licensing the logo, they wouldn't have to.

I think it was more likely that Sony was desperately trying to push their music streaming service when the system launched and didn't want any other method of playing music on the system. Even today, the web browser still doesn't support any audio codecs; only the half-assed Media Player (which users practically had to beg for) exists as an alternative to official streaming services like Spotify. The Plex app doesn't even have access to an audio codec, they have to transcode music into blank video files to play them on the PS4.

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CD is still required to be licensed when producing a player I think. Maybe that wasn't the entire reason, but it would still reduce costs. Anyways, even so...they still would need licenses for DVD/BD etc unless I am mistaken. I wish someone knew.

 

[Jraphics Horse]

IMO people that believe the difference will be USD 100 are overestimating the amount of games the average user buys. If it's USD 100 it's because Sony is upping the price of the disk version, instead of making the digital one cheaper.

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Why does it depend on if they are making one cheaper vs. making one more expensive? There is no obvious difference unless we know the construction cost. The difference in construction of the two units certainly won't be 100 dollars, but I don't think anyone is arguing otherwise.

 

[Andromeda]

Sony own the Blu-ray format and lead the BD Consortium (they're also part of the DVD Consortium); so they wouldn't need to pay licensing costs regardless.

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I think they would still need to pay a small share for the license.