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VX1

Member
Oct 28, 2017
7,000
Europe
I made nearly the same argument here in April. I totally agree.





Except console prices haven't nearly kept up with inflation. The intellivision was $299 in 1978, the 2600 was $199 in 1977. This is a great chart -


If consoles kept up with inflation we'd have $700 - $800 consoles today depending on what you wanted to use as a benchmark.

Even still at 2% year inflation growth, $299 in 2016 (when the Pro launched) is only ~ $312 today.
Thank you Albert! :)
 

bsigg

Member
Oct 25, 2017
22,542
Ok but... Couldn't you turn that around for Xbox too?

Here's another thought experiment: You're the CEO of Xbox. You're about to decide whether you are targeting $400 or $500. At the moment, you're lagging well behind your competitor. Your previous base console, not as successful as you might have hoped, was targeting $500.

How ballsy would you have to be to adopt the exact strategy the landed you in second place again?

The previous base console was also mired with bad messaging and an accessory not everyone wanted coupled with a competitor that came out with a more powerful console.
 

Dizastah

Member
Oct 25, 2017
6,124
How much do we think the PS4 Pro will cost by the end of the year? Maybe that will somewhat help us guess PS5 price.
Maybe.....
...I have no idea
 

Albert Penello

Verified
Nov 2, 2017
320
Redmond, WA
Ok but... Couldn't you turn that around for Xbox too?

Here's another thought experiment: You're the CEO of Xbox. You're about to decide whether you are targeting $400 or $500. At the moment, you're lagging well behind your competitor. Your previous base console, not as successful as you might have hoped, was targeting $500.

How ballsy would you have to be to adopt the exact strategy the landed you in second place again?

Great question. Theoretically I would first ask if I could have more success by flanking them than going head-on against them, while simultaneously shifting my business focus to services, subscriptions, and cloud.

I would also say the PlayStation analogy is more apples-to-apples than your Xbox one. The $500 play was with a less performing box and a bad bet on a mass-appeal device. Conversely, the $500 powerful box that just launched has been very successful vs. expectations and has done a lot to change the narrative around your brand.

So do you want to be Porsche or do you want to be Toyota? Both successful in their own right, targeting different audiences.

I've never suggested that the Xbox plan will beat the PlayStation plan. But it's possible (and Phil has said) maybe they are playing a different game, so to speak.
 

anexanhume

Member
Oct 25, 2017
12,913
Maryland
For all the people in the PS5 10TF+ camp I propose the following thought experiment.

You're the CEO of Playstation. You're about to decide whether you are targeting 400$ pricepoint or 500$ pricepoint. At the moment, you are a market leader with a giant 2x advantage over your immediate competitor. Your last two devices, both very successful and reasons you are a market leader, were targetting 400$. Playstation ecosystem, dependent on the number of sold units, is a giant source of revenue. If you screw up generation leap, your company will be hurt and you will likely be fired.

How ballsy would you have to be to drop a working strategy and try something new, just because your competition might target bigger pricepoint(and can still try to up you if they really, really care)?

Corporate leaders are rarely of the ballsy kind. They do not play with things that work. And that's why I think they will stick to price, with all the consequences of that.
That's a good way of looking at it. Another way is that they built the most successful generation in their history by trusting the architecture to a single entity, Mark Cerny. On top of that, they made a last minute cost decision to double the RAM. I think they can be persuaded by technical arguments.
 

Bradbatross

Member
Mar 17, 2018
14,196
xbox-series-x-3d-concept-front-and-rear.jpg


Pure SeX.
 

Deleted member 18951

User requested account closure
Banned
Oct 27, 2017
5,531
That's sort of the point I was trying to make. Just focusing on the cost of the console and building your entire strategy around just that figure is facile. There are more things at play here, especially now when subscription services and ecosystems are far more established.

I was under the impression that eventual RRP is what you base the console design and strategy on. Obviously I agree with you on things like ecosystems and subscriptions.
 

Deleted member 23046

Account closed at user request
Banned
Oct 28, 2017
6,876
I've been thinking, So the xbox series s gonna be 4 TF (rumours) so 1/3 of the series x. Well if they target 4k on the series x, 1/3 of 4K is 1440p. So the series s targets 1440p. And if the cpu, ssd and all but the gpu are the same. Then making games for both would not require much work at all. Maybe that's why the rumour is saying 4TF for the series s easy porting. The series s is also gonna be faster and better then the xbox one x. The series s is also gonna become a cheap and good 4k/ media player option. The more I think about it the more I think that the series s is really a good move from microsoft
A 2D measurements (pixel ratio) doesn't indicate how much a (3D) games weights on the GPU.

In your exemple, you do like if all ressources between 4 and 12 TF were only used for scalable effects.

But I could easily design a game for a 12TF GPU that couldn't run even at 720p on a 4TF GPU.

And I am also skeptical about a single portion of GPU sufficient to erase 200$ of the retail price.
 

Sho_Nuff82

Member
Nov 14, 2017
18,410
Great question. Theoretically I would first ask if I could have more success by flanking them than going head-on against them, while simultaneously shifting my business focus to services, subscriptions, and cloud.

I would also say the PlayStation analogy is more apples-to-apples than your Xbox one. The $500 play was with a less performing box and a bad bet on a mass-appeal device. Conversely, the $500 powerful box that just launched has been very successful vs. expectations and has done a lot to change the narrative around your brand.

So do you want to be Porsche or do you want to be Toyota? Both successful in their own right, targeting different audiences.

I've never suggested that the Xbox plan will beat the PlayStation plan. But it's possible (and Phil has said) maybe they are playing a different game, so to speak.

Yeah, launching at $100 price premium with everyone talking about your graphical shortcomings is a lot different than launching with a $100 price premium while everyone is gawking at your bells and whistles. The PS3 launch, the Wii U launch, and the Xbox One launch show that the hardcore fans that justify those premiums to themselves dry up pretty quick.

The One X and Pro demonstrated there is definitely an audience for the high end as long as the cost/performance ratio is perceived as reasonable.
 

radiotoxic

Member
Oct 27, 2017
1,019
For all the people in the PS5 10TF+ camp I propose the following thought experiment.

You're the CEO of Playstation. You're about to decide whether you are targeting 400$ pricepoint or 500$ pricepoint. At the moment, you are a market leader with a giant 2x advantage over your immediate competitor. Your last two devices, both very successful and reasons you are a market leader, were targetting 400$. Playstation ecosystem, dependent on the number of sold units, is a giant source of revenue. If you screw up generation leap, your company will be hurt and you will likely be fired.

How ballsy would you have to be to drop a working strategy and try something new, just because your competition might target bigger pricepoint(and can still try to up you if they really, really care)?

Corporate leaders are rarely of the ballsy kind. They do not play with things that work. And that's why I think they will stick to price, with all the consequences of that.
I won't dispute your reasoning, makes perfect sense. But then again you have Kenichiro Yoshida, the CEO of Sony Corp, saying that PS5 will be "a niche product", aimed at "hardcore gamers who obsess over the latest features".

Yeah, of course it's PR bullshit (if I want the latest features I would need a lot of money to build a hot new PC, he) but it's certainly not cheap console PR bullshit. And I know Jim Ryan spoke about the fastest transition blah, blah... It could mean a number of things besides price, things already discussed to death in this thread series.
 
Last edited:

Sekiro

Member
Jan 25, 2019
2,938
United Kingdom
Xsx;
With 10.6 ties with 2070s (52 cus 1600mhz)
With 11.3 ties with 2080 (52 cus 1700mhz or 56 cus 1600mhz)
With 12.1 (56 cus 1700 MHz) 4% better than 2080 and 3% less than 2080s and 20% less than 2080 ti
This taking account of rdna efficiency
This is a post that i'd like to remember when the official teraflop number gets revealed.
 

dynamitejim

Member
Oct 25, 2017
883
For all the people in the PS5 10TF+ camp I propose the following thought experiment.

You're the CEO of Playstation. You're about to decide whether you are targeting 400$ pricepoint or 500$ pricepoint. At the moment, you are a market leader with a giant 2x advantage over your immediate competitor. Your last two devices, both very successful and reasons you are a market leader, were targetting 400$. Playstation ecosystem, dependent on the number of sold units, is a giant source of revenue. If you screw up generation leap, your company will be hurt and you will likely be fired.

How ballsy would you have to be to drop a working strategy and try something new, just because your competition might target bigger pricepoint(and can still try to up you if they really, really care)?

Corporate leaders are rarely of the ballsy kind. They do not play with things that work. And that's why I think they will stick to price, with all the consequences of that.

To believe PS5 is 36CUs is to believe MS somehow got 16-24 more CUs in their console for the same price ($499) 3 years later, but Sony couldn't squeeze any more in for the same price ($399) 4 years later.
 

gundamkyoukai

Member
Oct 25, 2017
21,101
Yeah, launching at $100 price premium with everyone talking about your graphical shortcomings is a lot different than launching with a $100 price premium while everyone is gawking at your bells and whistles. The PS3 launch, the Wii U launch, and the Xbox One launch show that the hardcore fans that justify those premiums to themselves dry up pretty quick.

I should note that one of them went on to selling 80 million which not bad sales looking at consoles number over the years .
It was just bad for them since they sell more usually .
 

Berserker976

Member
Oct 27, 2017
1,425
Great question. Theoretically I would first ask if I could have more success by flanking them than going head-on against them, while simultaneously shifting my business focus to services, subscriptions, and cloud.

I would also say the PlayStation analogy is more apples-to-apples than your Xbox one. The $500 play was with a less performing box and a bad bet on a mass-appeal device. Conversely, the $500 powerful box that just launched has been very successful vs. expectations and has done a lot to change the narrative around your brand.

So do you want to be Porsche or do you want to be Toyota? Both successful in their own right, targeting different audiences.

I've never suggested that the Xbox plan will beat the PlayStation plan. But it's possible (and Phil has said) maybe they are playing a different game, so to speak.
I still think you could use a lot of those same arguments to claim that Sony should reasonably be shooting for a $500 price point too. The Playstation brand is seemingly extremely strong right now. I think they could pretty easily get away with charging $500 for a console without losing many people, especially if they come in at the same price as their competitor. I'm sure Sony hasn't missed how well the One X has rehabilitated MS's brand. Coming in at $100 lower against an MS machine not hamstrung by Kinect would inevitably mean significantly weaker hardware, and historically that hasn't been ground Sony has been willing to cede day and date. Lockhart might throw a bit of a wrench in things, but I still would really like to know how MS will position it before trying to figure out how it would affect things.
 
Aug 26, 2019
6,342
In one of his recent tweets, Zhuge explained what "fastest transition" meant. I think it has more to do with the services aspect than price. I'll have to look up the tweet.
 

gofreak

Member
Oct 26, 2017
7,734
Or Kenichiro Yoshida saying it was a system for niche system for hardcore gamers

To Yoshida, all PS customers are in that niche. He wasn't referring to what we here might consider 'hardcore gamers'. He was talking in very relative terms, next to the wider gaming industry covering mobile, social platform gaming etc. So whatever about anything else, I don't think his comment suggests Sony would be moving to a significantly more expensive product with the next PS or be angling after a smaller niche than the existing PS audience. (I don't think 449 or even 499 as a starting price would necessarily fall in that camp btw... but anything more probably would).
 

pure

Member
Jun 18, 2019
236
Germany
For all the people in the PS5 10TF+ camp I propose the following thought experiment.

You're the CEO of Playstation. You're about to decide whether you are targeting 400$ pricepoint or 500$ pricepoint. At the moment, you are a market leader with a giant 2x advantage over your immediate competitor. Your last two devices, both very successful and reasons you are a market leader, were targetting 400$. Playstation ecosystem, dependent on the number of sold units, is a giant source of revenue. If you screw up generation leap, your company will be hurt and you will likely be fired.

How ballsy would you have to be to drop a working strategy and try something new, just because your competition might target bigger pricepoint(and can still try to up you if they really, really care)?

Corporate leaders are rarely of the ballsy kind. They do not play with things that work. And that's why I think they will stick to price, with all the consequences of that.
The thing nobody talks about in this scenario is that launch pricing is not really relevant. If they have a price forecast and they know they can get to 399$ after 2 years because the components are projected to get cheaper, then launching at a higher prices should not impact sales performance. The first 2 years are for early adopters, mass adoption comes later. They also could choose to subsidize the launch price to get to their desired pricepoint and make it up the difference with services, like a PS Plus Premium or whatever. There are too many variables and factors we don't know to just say they'll stick with 399$ because it worked in the past.
 

d3ckard

Member
Dec 7, 2017
212
I still think you could use a lot of those same arguments to claim that Sony should reasonably be shooting for a $500 price point too. The Playstation brand is seemingly extremely strong right now. I think they could pretty easily get away with charging $500 for a console without losing many people, especially if they come in at the same price as their competitor. I'm sure Sony hasn't missed how well the One X has rehabilitated MS's brand. Coming in at $100 lower against an MS machine not hamstrung by Kinect would inevitably mean significantly weaker hardware, and historically that hasn't been ground Sony has been willing to cede day and date. Lockhart might throw a bit of a wrench in things, but I still would really like to know how MS will position it before trying to figure out how it would affect things.

They could build a 600$ device having a very strong brand at the moment. In fact, they even tried it once. Ended badly.
It's not that they cannot, it's that they lack motivation to do so. Bigger price - less potential customers.

MS on the other hand already battle-tested 499$ pricepoint with the device that made miracles to their brand. Phil wants the power crown, because it gives him differentiator. Sony can just go back to their reputation of awesome first-party titles. They don't need that crown.
 

Albert Penello

Verified
Nov 2, 2017
320
Redmond, WA
I still think you could use a lot of those same arguments to claim that Sony should reasonably be shooting for a $500 price point too. The Playstation brand is seemingly extremely strong right now. I think they could pretty easily get away with charging $500 for a console without losing many people, especially if they come in at the same price as their competitor. I'm sure Sony hasn't missed how well the One X has rehabilitated MS's brand. Coming in at $100 lower against an MS machine not hamstrung by Kinect would inevitably mean significantly weaker hardware, and historically that hasn't been ground Sony has been willing to cede day and date. Lockhart might throw a bit of a wrench in things, but I still would really like to know how MS will position it before trying to figure out how it would affect things.

This is a fair counter-point, for sure. There are *also* good reasons Sony may be targeting a higher price and I think this is a logical thought process.

I would simply be surprised if they they thought this way. The volume difference of the Pro vs. the X would suggest the better bet is $399 than matching a TFLOPS battle. I assume that would be Sony's takeaway from what's happening in the market.

Of course Sony cares about performance. But do they care more about volume is the key question in my mind.
 

dom

▲ Legend ▲
Avenger
Oct 25, 2017
10,439
In one of his recent tweets, Zhuge explained what "fastest transition" meant. I think it has more to do with the services aspect than price. I'll have to look up the tweet.
Leveraging streaming is another way to do that. People could buy a digital PS5 game and play it on their PS4 by streaming it which could keep the person in the ecosystem and allow them to upgrade to native hardware at a later date.
 

bcatwilly

Member
Oct 27, 2017
2,483
Great question. Theoretically I would first ask if I could have more success by flanking them than going head-on against them, while simultaneously shifting my business focus to services, subscriptions, and cloud.

I would also say the PlayStation analogy is more apples-to-apples than your Xbox one. The $500 play was with a less performing box and a bad bet on a mass-appeal device. Conversely, the $500 powerful box that just launched has been very successful vs. expectations and has done a lot to change the narrative around your brand.

So do you want to be Porsche or do you want to be Toyota? Both successful in their own right, targeting different audiences.

I've never suggested that the Xbox plan will beat the PlayStation plan. But it's possible (and Phil has said) maybe they are playing a different game, so to speak.

I say give me the keys to that Xbox Porsche :)
 

tomwarren

Senior Editor, The Verge
Verified
Apr 18, 2018
339
This is a fair counter-point, for sure. There are *also* good reasons Sony may be targeting a higher price and I think this is a logical thought process.

I would simply be surprised if they they thought this way. The volume difference of the Pro vs. the X would suggest the better bet is $399 than matching a TFLOPS battle. I assume that would be Sony's takeaway from what's happening in the market.

Of course Sony cares about performance. But do they care more about volume is the key question in my mind.
What do you think about Microsoft potentially launching both an Xbox Series X and Xbox Series S at the same time?
 

d3ckard

Member
Dec 7, 2017
212
That's a good way of looking at it. Another way is that they built the most successful generation in their history by trusting the architecture to a single entity, Mark Cerny. On top of that, they made a last minute cost decision to double the RAM. I think they can be persuaded by technical arguments.

Ok, about that, and I will try to use very neutral words. I don't think people judge Mark Cerny right. X1/PS4 launch was a very once-in-a-lifetime thing, with MS betting all on 8GBs of RAM and failing when better dices became available. If you look what Cerny actually had in mind, it's 1.8TF 4GB GDDR5 RAM device. Nice - but nothing to write home about. Even final PS4 would be a disappointment(nobody was excited for a mid-range Radeon GPU power), but compared to Xbox(that screwed up on unrelated reasons, though I see them as just unlucky) it looked great.

8.5TF PS5 is exactly something like Cerny would build - powerful enough to bring new level of gaming, featureful enough to be interesting, cheap enough to be mass-market from the start.
 

gundamkyoukai

Member
Oct 25, 2017
21,101
They could build a 600$ device having a very strong brand at the moment. In fact, they even tried it once. Ended badly.
It's not that they cannot, it's that they lack motivation to do so. Bigger price - less potential customers.

MS on the other hand already battle-tested 499$ pricepoint with the device that made miracles to their brand. Phil wants the power crown, because it gives him differentiator. Sony can just go back to their reputation of awesome first-party titles. They don't need that crown.

It did not end badly .
If it did MS has never had a good consoles gen yet .
 
Dec 10, 2019
298
Klee said both consoles were 10+

The PS5 is one of "both consoles."

That is something substantial. And I'm not sure how you can claim the github leak is "the only reliable information" when Matt posted that he was relieved that we'd moved on from thinking it was any kind of confirmation of anything, and Klee said the specs didn't match up with what he knew.
Maybe an early development kit using non final hardware.
Or the development kit is 40 full active CU at 2000Mhz max and that would be 10.24 TF

But that is not indicative of the consumer PS5.
And then again it's all just alleged second hand hand information from whoever.
Just leak target spec whitepapers and I'm fine.

All that is the definition of unsubstantial unlike all the other information that is out there.
And we know Ps5 development kits are out there. We have a ton of pictures of them. Yet nothing about the specs 9 months before launch.
 

Berserker976

Member
Oct 27, 2017
1,425
They could build a 600$ device having a very strong brand at the moment. In fact, they even tried it once. Ended badly.
It's not that they cannot, it's that they lack motivation to do so. Bigger price - less potential customers.

MS on the other hand already battle-tested 499$ pricepoint with the device that made miracles to their brand. Phil wants the power crown, because it gives him differentiator. Sony can just go back to their reputation of awesome first-party titles. They don't need that crown.
This is a fair counter-point, for sure. There are *also* good reasons Sony may be targeting a higher price and I think this is a logical thought process.

I would simply be surprised if they they thought this way. The volume difference of the Pro vs. the X would suggest the better bet is $399 than matching a TFLOPS battle. I assume that would be Sony's takeaway from what's happening in the market.

Of course Sony cares about performance. But do they care more about volume is the key question in my mind.
Interesting points to consider. I'm not fully convinced yet, but I definitely understand the thought process behind the speculation about different price strategies a lot better now.

Thanks for taking the time to respond!
 

cdigs

Member
Apr 4, 2019
782
How much do we think the PS4 Pro will cost by the end of the year? Maybe that will somewhat help us guess PS5 price.
Maybe.....
...I have no idea

This is something I've been thinking about as well.

If Sony keeps the PS4 Pro around, do they drop it to $299 by the time PS5 comes out? I just can't see them offering the PS4 Pro at $199 -- a $200 drop from the PS4 Pro's current price of $399. It's possible, but I would consider it unlikely.

Why does that matter? Well, how do you expect to move PS4 Pros at $299 if the PS5 comes out at $399? There's not enough difference there. The PS5 would almost have to be $499 to coincide with the idea that it is a "premium" offering, as stated by Mark Cerny. The word "premium" insinuates that it is being compared to what came before it (the PS4 Pro).

Now, if you believe Sony will just discontinue the PS4 Pro and phase it out of retailers, then these points don't matter as much. But I admittedly don't know what the precedent is for phasing out a previous console when a new generation starts.
 

Patent

Self-requested ban
Banned
Jul 2, 2018
1,621
North Carolina
Ok, about that, and I will try to use very neutral words. I don't think people judge Mark Cerny right. X1/PS4 launch was a very once-in-a-lifetime thing, with MS betting all on 8GBs of RAM and failing when better dices became available. If you look what Cerny actually had in mind, it's 1.8TF 4GB GDDR5 RAM device. Nice - but nothing to write home about. Even final PS4 would be a disappointment(nobody was excited for a mid-range Radeon GPU power), but compared to Xbox(that screwed up on unrelated reasons, though I see them as just unlucky) it looked great.

8.5TF PS5 is exactly something like Cerny would build - powerful enough to bring new level of gaming, featureful enough to be interesting, cheap enough to be mass-market from the start.
8.5 now? how low can we gooooo
 

sncvsrtoip

Banned
Apr 18, 2019
2,773
Great question. Theoretically I would first ask if I could have more success by flanking them than going head-on against them, while simultaneously shifting my business focus to services, subscriptions, and cloud.

I would also say the PlayStation analogy is more apples-to-apples than your Xbox one. The $500 play was with a less performing box and a bad bet on a mass-appeal device. Conversely, the $500 powerful box that just launched has been very successful vs. expectations and has done a lot to change the narrative around your brand.

So do you want to be Porsche or do you want to be Toyota? Both successful in their own right, targeting different audiences.

I've never suggested that the Xbox plan will beat the PlayStation plan. But it's possible (and Phil has said) maybe they are playing a different game, so to speak.
"Conversely, the $500 powerful box that just launched has been very successful vs. expectations and has done a lot to change the narrative around your brand." - and Sony could saw that and decided that they wouldn't allow for big performance difference nextgen ;)
 

DigSCCP

Banned
Nov 16, 2017
4,201
For all the people in the PS5 10TF+ camp I propose the following thought experiment.

You're the CEO of Playstation. You're about to decide whether you are targeting 400$ pricepoint or 500$ pricepoint. At the moment, you are a market leader with a giant 2x advantage over your immediate competitor. Your last two devices, both very successful and reasons you are a market leader, were targetting 400$. Playstation ecosystem, dependent on the number of sold units, is a giant source of revenue. If you screw up generation leap, your company will be hurt and you will likely be fired.

How ballsy would you have to be to drop a working strategy and try something new, just because your competition might target bigger pricepoint(and can still try to up you if they really, really care)?

Corporate leaders are rarely of the ballsy kind. They do not play with things that work. And that's why I think they will stick to price, with all the consequences of that.

I agree with all your points.
Except for :

How ballsy would you have to be to drop a working strategy and try something new, just because your competition might target bigger pricepoint(and can still try to up you if they really, really care)?

If they drop their working strategy it´s not because their competition might target a bigger pricepoint.
If they go for this route it´s because they believe they can sell their product at a bigger pricepoint, because they think it´s better for their devs to have a more powerful machine, because they believe we may be looking into a longer gen cicle or any other reason that concern Sony themselves and only that.
I don´t think they will follow this route but if they do it won´t because MS did it and some forums users are raving about it you can be sure of that.
 

Fabtacular

Member
Jul 11, 2019
4,244
Lamfo Man Y'all underestimate the PlayStation brand power if think sony can't afford 499$ or the ps5 will have a hard time to sell at that price.

I feel like you're misunderstanding the conversation around price on the PS5.

It's not about what Sony (or MS for that matter) can "afford" in terms of production costs or losses on HW at launch. And it's not about whether Sony can sell more consoles than MS at a certain price point. Gaming is a huge percentage of Sony's overall business, and therefore the profitability of their gaming division dives a large part of the company's overall financial position (and therefore stock price, an item extremely important to decision-makers in the company).

At the end of the day, their decision-making goes like this: "If we build a box at a $500 price point, rather than a $400 price point, are we going to sell more consoles and drive more gaming revenue?" If the answer is "no" then it doesn't make sense to build a $500 box unless you think there are external strategic factors at play. Consider all the factors that are constantly raised in Sony's favor in the console wars threads:,
  • Exclusive games are a key driver of platform choice, and Sony's first-party has been much more successful than MS over the past decade
  • Xbox has barely any presence in most markets outside of US/UK
  • Playstation brand loyalty / presence is so strong that just posting the PS5 logo on Twitter/Instagram drove incredible social media engagement
  • By virtue of its market position, PS is able to obtain third-party exclusive deals much more cheaply than Xbox
Based on the above, and considering that the lion's share of profits in the console space is based upon collecting the platform fees for games, selling services such as PS+, and selling accessories, it would make the most business sense to design your console for a price point that is going to move the most total units. When you consider all of that, why would Sony care to engage in a spec pissing contest if they could provide a functionally on-par box at $400?

(Alternatively, if you want to take the position that then they would just eat a $100 loss on each console, consider what that means. Assume that over the life of the console, that number becomes $50; because maybe they're eating $100 on the early consoles but that number decreases over the life of the console. If they sell 100 million consoles this generation, eating $50 per unit means $5 billion less profits. That doesn't make sense at all, when you could invest that money so many different ways.)

Does this mean it never makes sense for Sony to target the high end of the price range at launch? No. Maybe they've decided that VR is still poised to be the next big thing, and have decided that they need the specs of a $500 box to deliver on a next-gen VR experience with PSVR2 in 2022? Or maybe they think that by not ceding any performance high-ground to Xbox they can get MS out of the console business for good? Or maybe they feel like by beefing up the specs today, they may lose a certain number of sales early in the generation, but they'll be able to extend the PS5's life for a year or two more, which will be overall more profitable in the long-term?

This is what people are talking about when they question whether it makes sense for Sony to design their console at a $500 price point. For reasons discussed immediately above, that doesn't mean there's no way they'll do it. It just means that, on the face of things, there are extremely compelling business reasons to target a more modest price point.
 

gundamkyoukai

Member
Oct 25, 2017
21,101
This is a fair counter-point, for sure. There are *also* good reasons Sony may be targeting a higher price and I think this is a logical thought process.

I would simply be surprised if they they thought this way. The volume difference of the Pro vs. the X would suggest the better bet is $399 than matching a TFLOPS battle. I assume that would be Sony's takeaway from what's happening in the market.

Of course Sony cares about performance. But do they care more about volume is the key question in my mind.

I would think they care about the high spending early buyers which power is a factor .
Also if they care about volume so much then PS4 would have not been $299 after 5 years .
There is a line and i don't think $499 would be bad for the first year to get the high spenders .
 

H-I-M

Banned
Apr 26, 2018
1,330
The thing nobody talks about in this scenario is that launch pricing is not really relevant. If they have a price forecast and they know they can get to 399$ after 2 years because the components are projected to get cheaper, then launching at a higher prices should not impact sales performance. The first 2 years are for early adopters, mass adoption comes later. They also could choose to subsidize the launch price to get to their desired pricepoint and make it up the difference with services, like a PS Plus Premium or whatever. There are too many variables and factors we don't know to just say they'll stick with 399$ because it worked in the past.


The first two years are very important.
Maybe not for everyone, but they'll be crucial for Sony.
If the PS5 has a 'slow' start, it will instantly be labeled as a failure because it couldn't sell as fast as the previous console and the Switch (that's constantly being compared to the PS4, sales wise).

That's what selling over 100 million consoles does to you.
 

Blanquito

The Fallen
Oct 28, 2017
1,168
This is a fair counter-point, for sure. There are *also* good reasons Sony may be targeting a higher price and I think this is a logical thought process.

I would simply be surprised if they they thought this way. The volume difference of the Pro vs. the X would suggest the better bet is $399 than matching a TFLOPS battle. I assume that would be Sony's takeaway from what's happening in the market.

Of course Sony cares about performance. But do they care more about volume is the key question in my mind.
I don't know if we've ever actually seen the numbers on the volume difference between the two though, have we? (By "we" I mean people on this forum, not people that may have been privvy to those details ;) )

So... the unanswered questions are: does that mean that Pro was outselling XBX? By a little? By a lot? (I'm not actually asking you to answer them, more just stating them)

If we did have that information, then maybe we could speculate off of it. But I don't think we do.
 

Albert Penello

Verified
Nov 2, 2017
320
Redmond, WA
I feel like you're misunderstanding the conversation around price on the PS5.

It's not about what Sony (or MS for that matter) can "afford" in terms of production costs or losses on HW at launch. And it's not about whether Sony can sell more consoles than MS at a certain price point. Gaming is a huge percentage of Sony's overall business, and therefore the profitability of their gaming division dives a large part of the company's overall financial position (and therefore stock price, an item extremely important to decision-makers in the company).

At the end of the day, their decision-making goes like this: "If we build a box at a $500 price point, rather than a $400 price point, are we going to sell more consoles and drive more gaming revenue?" If the answer is "no" then it doesn't make sense to build a $500 box unless you think there are external strategic factors at play. Consider all the factors that are constantly raised in Sony's favor in the console wars threads:,
  • Exclusive games are a key driver of platform choice, and Sony's first-party has been much more successful than MS over the past decade
  • Xbox has barely any presence in most markets outside of US/UK
  • Playstation brand loyalty / presence is so strong that just posting the PS5 logo on Twitter/Instagram drove incredible social media engagement
  • By virtue of its market position, PS is able to obtain third-party exclusive deals much more cheaply than Xbox
Based on the above, and considering that the lion's share of profits in the console space is based upon collecting the platform fees for games, selling services such as PS+, and selling accessories, it would make the most business sense to design your console for a price point that is going to move the most total units. When you consider all of that, why would Sony care to engage in a spec pissing contest if they could provide a functionally on-par box at $400?

(Alternatively, if you want to take the position that then they would just eat a $100 loss on each console, consider what that means. Assume that over the life of the console, that number becomes $50; because maybe they're eating $100 on the early consoles but that number decreases over the life of the console. If they sell 100 million consoles this generation, eating $50 per unit means $5 billion less profits. That doesn't make sense at all, when you could invest that money so many different ways.)

Does this mean it never makes sense for Sony to target the high end of the price range at launch? No. Maybe they've decided that VR is still poised to be the next big thing, and have decided that they need the specs of a $500 box to deliver on a next-gen VR experience with PSVR2 in 2022? Or maybe they think that by not ceding any performance high-ground to Xbox they can get MS out of the console business for good? Or maybe they feel like by beefing up the specs today, they may lose a certain number of sales early in the generation, but they'll be able to extend the PS5's life for a year or two more, which will be overall more profitable in the long-term?

This is what people are talking about when they question whether it makes sense for Sony to design their console at a $500 price point. For reasons discussed immediately above, that doesn't mean there's no way they'll do it. It just means that, on the face of things, there are extremely compelling business reasons to target a more modest price point.

This is an EXCELLENT post. Everyone should read it.
 
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