The coronavirus pandemic has infected and shut down much of the global economy, causing concern over whether or not the PlayStation 5 release date will have to be postponed. Sony doesn’t appear to be too bothered, however, as an inside source confirms that the the PS5 is still on track to be released this holiday season. However, the source also reports that initial production will be limited this year due to cost, both for the manufacturer and the consumer.
Supply and Demand
The PlayStation 5 incorporates new specs that may be attractive to gamers, but the high cost and low availability of certain parts that allow for these features will push Sony to limit manufacturing of the console upon initial release. This is partially because the company believes the hefty price tag on the PS5 will curb consumer demand, but the scarcity of certain parts in this time of isolation to prevent the spread of the virus is also to blame. Many who would normally be working to produce these parts are at confined to their homes in self-quarantine. Additionally, a number of these parts are difficult to source because their applications are not PS5-specific, which means Sony has to compete with other companies for a sparse supply that was already tight prior to the Covid-19 outbreak.
How Much will the PS5 Cost?
The price of the PS5 is expected to reflect the cost of manufacturing with the console’s upgraded technical specs. While Sony has largely remained quiet over the PS5’s new features, some of these specs have been briefly touched upon, including support for backwards compatibility, upgrades to the hardware, and the new DualSense controller which uses haptic feedback to make gameplay more immersive. However, these specs do not solely account for all of the new features Sony has added to the console, and game developers who have been working on titles for the PS5 have given price estimates that range from $499 and $549.
This is a reasonable estimate range, since the difficulty in sourcing some parts for the PlayStation 5 has made it unlikely Sony will be able to drop manufacturing costs below $450. Historically, Sony has never made much profit off console sales, but instead relies on subscriptions and live services to drive most of its PlayStation-related profit. While the PlayStation 3 was sold at a loss to the company, the PlayStation 4, manufactured at roughly $381 per console and sold at $399, only did marginally better than its predecessor, making Sony a meager $19 per console purchased.
It is probable that this trend will continue when the PS5 is released, and it’s even possible that the console’s price will be reduced in time if it can generate a large enough user base that subscribes to the services which have proven profitable for PlayStation. At this time, however, it appears that only a small group of consumers will be able to afford the new console, a notion that is further supported by the news that PS5 production will be limited in 2020.
Limited Production, but No Delay
The PlayStation 5’s production is expected to start less than two months away in June. This poses concerns over supply of parts as this pandemic currently remains a threat to worker safety and global economic activity. Sony told assembly partners that it would manufacture 5 to 6 million consoles in the fiscal year ending in March 2021. This is less than the 7.5 million PlayStation 4 consoles sold within the first two quarters following its release, and even so, these forecasted numbers might still be too high for immediate manufacture.
However, while the production of the PS5 may be limited, as long as Microsoft’s Xbox X is still set to come out for holiday 2020, the PS5 is sure to be released too. It’s likely that Sony will make their PS5 price announcement only after considering Microsoft’s new console price. As for exact pricing and console release dates, only time will tell.
