Technology the problem with its price could be more serious...

the problem with its price could be more serious for Sony

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A few hours ago, a report published by Bloomberg unveiled the difficulties Sony is going through to define the final price of the PlayStation 5, console that will go on sale during the last quarter of 2020. According to the aforementioned medium, the component shortage, mainly in DRAM and NAND Flash memories, has triggered the cost of production up to 450 dollars. Of course, this would cause consumers to have to disburse a larger amount.

Undoubtedly, the price of next-generation consoles is one of the unknowns that cause more interest in the industry, especially for players. Various reports published in 2019 anticipated that, according to sources close to the plans of Sony and Microsoft, the new proposals would cost approximately $ 500, so the information from Bloomberg It may not be surprising to some.

The problem, however, is that over the months it was possible to see that the PS5 and Xbox Series X could follow very different launch strategies from each other, and this is where the Japanese company would be in a bind; I explain why. Of course, it is important to clarify that everything is based on reports not confirmed by either company.

Different approaches and objectives

In early January, Eurogamer, a fairly reliable source in the video game industry, revealed the alleged specifications of the PlayStation 5, which were obtained after a test of the console in August. According to the aforementioned medium, the processor could reach 36 computing units at 2.0 GHz, while the GPU would reach 9.2 Teraflops. The RAM would be GDDR6 with a bandwidth of 512 GB / s, possibly with a capacity of 16 GB.

However, the most interesting part of the report is that the Xbox Series X would offer greater performance. Microsoft hardware would arrive at 56 computing units and 12 Teraflops, a quite significant disparity with the PS5. Does this mean that Sony did not expect the power of its competitor? Did they lose the opportunity to react and match conditions? No and no, not at all; surely the two companies know the characteristics of the “enemy” proposal. After all, both share the same CPU and GPU technology provider: AMD.

The technical information, if finally finalized, would reveal the different strategies that each will follow. Sony would bet on offering the cheapest console of the next generation, but not the most powerful. Microsoft, on the other hand, will promote the Xbox Series X as the hardware with the highest performance, but will not be able to presume the price, as it would clearly be higher.

If an even deeper analysis is performed, we could deduce that the PlayStation 5 will be the direct successor of the standard version of PS4, not the PS4 Pro. For its part, the Xbox Series X would arrive to replace the Xbox One X, not the Xbox One S. In fact, those of Redmond opened the doors to variants of their new console in the future, hence the name of “Series “.

For all the above, we cannot rule out that the PlayStation 5 and Xbox Series X are not even direct rivals as far as price and specifications are concerned. In the next few years, even before, Sony would match the power of its opponent by launching a PS5 Pro, and Microsoft would do the same with a hypothetical Xbox Series S of lower performance and price. The coin is in the air.

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Sony’s setback and its possible solution

Giuseppe Spinelli

Once the two hardware approaches have been explained, it will be a fundamental decision for Sony to define the price of the PS5. If you really want to distinguish yourself from your opponent in that regard, then the difference in cost must be considerable. This is where we can determine, thanks to the report shared by Bloomberg, that the increase in the cost of production can be a very big problem for those in Tokyo.

And is that If its price fails to distance itself enough from the Xbox Series X, the latter could become more attractive to the consumer. Obviously, other factors will influence such as the catalog of launch titles, which so far remains a great mystery in both cases. Microsoft has already confirmed that, at least in the first years, its exclusive games will be intergenerational. In other words: titles like Halo: Infinite will be available on both Xbox One and Xbox Series X.

Faced with this situation, Sony would have no other option than sell the PlayStation 5 with initial loss. However, it would not be the first time a console firm resorts to this strategy to boost sales. In 2006, the Xbox 360 landed on the market at a price of $ 399, but making it cost 470. As time went by, demand increased and it was feasible to decrease component expenses to generate profits. Certainly, Microsoft is a company with significant economic power, so they had no trouble starting this way.

“Microsoft, first you”

Bloomberg ensures that Sony is waiting to know the price of the Xbox Series X, since from that moment it would be easier to make a decision regarding your product. If the Microsoft console exceeds the $ 500 barrier, then they would have a greater room to maneuver to establish the cost of the PS5; even without resorting to losses during the first months.

Hiroki Totoki, Sony CFO, he showed the same thing a few days ago: “What is still not very clear is because we are competing in a space, so it is very difficult to comment on the price at this time. And depending on that price level, we will have to determine the promotion we are going to carry out and how many expenses we are prepared to pay. “

For now it is unknown when Redmond will celebrate the event of his console. While some point to the conference in the E3 2020, which will take place in the second week of June, others say that months before we will know new information. In relation to Sony, everything indicates that they did not reveal the price during the presentation event of the PlayStation 5. Recall that the Japanese entity will not attend the fair in Los Angeles, California.

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