Sony increasing PS5 production plans

[the-pi-guy]

Bloomberg - Are you a robot?

Sony Corp. is roughly doubling its PlayStation 5 production to 10 million units this year as it sees the prolonged effects of the Covid-19 pandemic boosting demand for gaming, according to people familiar with its plans.

The electronics giant has informed assembly partners and suppliers it's radically increasing orders for its next-generation console, though logistics may yet pose a challenge to delivering all those machines on time for the holiday shopping season, the people said, asking to remain anonymous. Sony had previously aimed to produce 5 million to 6 million PS5 units by the end of March 2021, Bloomberg News has reported.

[the-pi-guy]

By comparison PS4 sold 7.5m in the first two quarters.

[Xevross]

That's a huge increase and it seems more right. PS4 was supply constrained and interest in PS5 looks insane. It makes sense they can sell 2.5m more in the fiscal year. 2million less than PS4 was silly talk.

Now we're going to have some real fun sales figures to watch.

[the-pi-guy]

Both.

It also shows that they are confident that they will outsell competitors during the holiday period too. https://t.co/kt4uA9h9pU

— Daniel Ahmad (@ZhugeEX) July 15, 2020

[the-pi-guy]

Would be fun to be surprised by $399/$449 price points.

[kitler53]

i mean, at my local target i have not seen a ps4 since the covid quarenteen started.   i've seen an xbox only like once.  and while i've seen a ton of the switch lite i haven't seen a regular switch either.   and NPD sales are way up to match my observations.  

i think it is a good idea that they are plannng 10 million for just this year.  there is clearly a thirst for gaming consoles right now.    

[Xevross]

Would be fun to be surprised by $399/$449 price points.

Yeah that would be crazy but thinking from Sony's perspective it makes sense too, especially considering this news. I guess we'll see. Considering the estimated $450 BOM:

$449 regular would be a ~$60-80 loss per console, slightly more than PS4.
$399 digital would be about ~$90-110 loss per console, so more than PS4 but they can recover more profit from a digital edition.

Given the uncertainties I'm still expecting $449/ $499.

Edited with newer estimates.

[the-pi-guy]

I still think it's crazy that Sony pulled out a digital version.

[Xevross]

Perhaps cost estimates I saw were a bit off. Apparently PS4 BOM was $372 at launch and that was sold at ~$50 loss at $399. This would mean if $450 is accurate for PS5 then its looking at about $480 to be sold at the same level of loss as PS4. However the $450 report came out to say Sony was struggling with the BOM due to the covid situation, so the price may go down a lot towards the end of the year.

$499 for regular PS5 would probably be more profitable than PS4 launch, $449 would be more of a loss. Personally think it makes more sense to take more of a loss due to growth of networks and digital, so if $450 BOM is right then $449/$399 PS5 makes most sense.

[the-pi-guy]

Perhaps cost estimates I saw were a bit off. Apparently PS4 BOM was $372 at launch and that was sold at ~$50 loss at $399. This would mean if $450 is accurate for PS5 then its looking at about $480 to be sold at the same level of loss as PS4. However the $450 report came out to say Sony was struggling with the BOM due to the covid situation, so the price may go down a lot towards the end of the year.

$499 for regular PS5 would probably be more profitable than PS4 launch, $449 would be more of a loss. Personally think it makes more sense to take more of a loss due to growth of networks and digital, so if $450 BOM is right then $449/$399 PS5 makes most sense.

Where did you get the $50 loss?

[Xevross]

Where did you get the $50 loss?

If you look around online the estimates from many sources were $50-60 loss. Also Sony said at the time that a PS+ subscription + 2 games bought with the console gives them a profit iirc.

[the-pi-guy]

If you look around online the estimates from many sources were $50-60 loss. Also Sony said at the time that a PS+ subscription + 2 games bought with the console gives them a profit iirc.

Oh yep I remember that comment!  Thereabouts.

[Legend]

I still think it's crazy that Sony pulled out a digital version.

Wonder if that was kinda last minute and part of this increase. I don't think anyone expected it.

[kitler53]

Wonder if that was kinda last minute and part of this increase. I don't think anyone expected it.

i wonder what the production ratio will be.  50/50?

[Dr. Pezus]

i wonder what the production ratio will be.  50/50?

Nah I think digital will be 30-40% maybe

Remember how crazy we thought ps4 for 399 was? Imagine if ps5 launches at that price. It would do bonkers. Seems more of a premium product tbh