Does it Matter if The PS5 is More Expensive Than The Xbox Series X?
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A few months back, Bloomberg revealed that each PlayStation 5 cost $450 to manufacture, higher than the $381 it cost to manufacture the PS4 at launch. The PS4 went on to retail for $399 but Sony still lost a sizeable chunk of change for every PS4 sold after taking out distributor and retailer share, marketing, and other expenses. Losing money on every console at the early stages of a console’s life, isn’t unusual or troubling for Sony and Microsoft, since they generate most of their profits from software and more recently, subscription services.
However, with the PS5 costing more to produce than the PS4 at launch, and likely more than the Xbox Series X—thanks to its proprietary components—Sony is being smart by waiting for the Series X price announcement. Analysts speculate a PS5 price tag of $499, which is relatively steep for an entertainment device that’s releasing in a time when many folks are struggling to afford basic necessities.
Microsoft knows this and will leverage its cheaper-to-produce hardware to entice folks who are eager to experience the new generation of high fidelity games without breaking the bank. The question is, how low is Microsoft prepared to go?
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