What you need to know
- PlayStation 5 pricing may be higher than expected.
- Tight supply of DRAM is causing headaches for Sony.
- Xbox Series X may not have the same issue, but uncertainty remains.
Bloomberg Technology claims Sony is running into some manufacturing issues with the forthcoming PlayStation 5. The reporting cites "scare components" as the issue, resulting in a significant push in costs for the next-gen gaming console.
The problem is a familiar one. Sony is supposedly having a tough time securing reasonable prices on a reliable supply of DRAM and NAND flash memory. It's so bad that Sony also reportedly canceled some new features for a mirrorless camera due to the DRAM supply problem (just three companies manufacture 98 percent of the world's supply).
The reason is simple: smartphones. Samsung's latest Galaxy S20 lineup is massive, and its specs have only gone up in recent years, cutting into the same supply that game consoles use. Apple can't be dismissed from this either, as that company is notorious for locking up supply components early and fast due to its size, influence, and position in the market.
Bloomberg Technology adds that some other costs for the PlayStation 5 that are already locked in, including a more expensive than usual cooling system.
With the PlayStation 5 reportedly costing $450 per unit, the reporting suggests a $470 price tag for the console to maintain a similar gross margin to PlayStation 4. That older unit supposedly costs just $381 to make and sells for $399, making Sony's latest significantly more expensive. Kotaku sees that pricing as even more dire for the Australian market after shipping and distribution costs are factored in.
Surprisingly, there is no mention of Microsoft and its Xbox Series X console in this reporting. Microsoft's console also uses many high-end components, and its price is not expected to be as low as the One X or One S, which remain as options for consumers. Indeed, one report says that Series X's SSD may actually be DRAM-less – a first in this market – which could help Microsoft skirt this supply issue, at least partially. The solution for Microsoft, which is unconfirmed, is the reliance on Phison's newer PS5019-E19T flash memory controller.
At XO19 last year, head of Xbox Phil Spencer remarked, "I would say a learning from the Xbox One generation is we will not be out of position on power or price," suggesting the company has thought long and hard about this topic. Confirming this, recent reporting suggests Microsoft has added support for next-gen CFExpress SSD cards for easy, fast (and pricey) storage expansion.
Nonetheless, as electronics, smartphones, laptops, gaming consoles, and even smart cars begin to suck up more silicon, it's not known what impact this will have on Series X pricing. Many tech companies – including Microsoft – also are factoring in the COVID-19 Coronavirus outbreak into quarterly guidance for investors (NVIDIA did the same on February 13).
How Sony copes with its supply problems could be a big deal, especially if the company must sell "at cost," which undercuts margins. Microsoft doesn't seem to be concerned, though, as so far, we have not heard anything dire. How the pricing shakes out between the two gaming behemoths will be fascinating to watch.
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