The next generation of video game consoles is just around the corner. Sony and Microsoft are in the middle of a console war; each company is trying to undercut their competitor while providing a more powerful product. However, a recent report reveals manufacturing problems might inflate the PlayStation 5‘s retail price.
According to Bloomberg News, “people with knowledge of the matter” claim that each PlayStation 5 unit will cost $450 to produce. The culprit behind this development is good old component scarcity and related costs.
While Sony has not commented on the matter, Bloomberg states that the company had trouble securing enough DRAM and NAND flash memory. These components are in high demand as of late because smartphone manufacturers are using them to produce their own next-gen products.
The PlayStation 5’s manufacturing cost woes don’t end with flash memory, however. According to Bloomberg’s sources, Sony opted for unusually expensive cooling systems. The company shelled out several dollars per unit (usually, console cooling systems cost less than a dollar) to ensure that “heat dissipation from the powerful chips housed inside the console isn’t an issue.”
Given the PlayStation 5’s production costs, Bloomberg predicts the console will retail for at least $470. They reached this number by utilizing the gross margin of the original PlayStation 4, which sold for $399 and cost $381 to produce.
On the bright side, the coronavirus will not affect the PlayStation 5’s price or release window.
The PlayStation 5 is scheduled to launch later this year. We will have to wait and see if Bloomberg’s price prediction comes true.