Sony CFO Hiroki Totoki has confirmed last Wednesday during an earning’s briefing that the PS5 Disc consoles are no longer selling at a loss, meaning that the manufacturing costs are now met by the $500 retail price. Although Sony is no longer selling PS5 units, that only goes for the disc version, the digital-only version however still costs more to produce than the $400 price point it’s currently at.
The loss is made up by peripherals, says Sony
Sony has also confirmed that the losses on the PS5 Digital version, as well as the PS5 Disc version when it was still sold at a loss, are offset by the more margin-rich peripherals of the PS5, as well as the PS4 peripherals and the console itself. Selling the consoles at a loss at the beginning of a new console generation is nothing new, companies usually do it to stay competitive in the market, incentivize new consumers to join the eco-system, and encourage existing customers to upgrade as soon as possible.
Did Sony learn their lesson from the $600 PS3?
It’s worth mentioning that Sony seemingly has learned its lesson from its 7th gen misstep of having the PS3 at a $600 entry price point, the console was also late to the part releasing a whole year after the Xbox 360 and giving up a big share of the market. Since then, the PS3 ended up catching up to the Xbox 360 console and eventually even outsold it.
Microsoft has so hasn’t disclosed whether or not it has been selling the Xbox Series X/S consoles at a loss, although that is highly likely. Xbox boss Phil Spenser has said that the real profit comes in from the software sales as well as the Services such as Xbox Game Pass and Xbox Live Gold.