In time for the holiday season in 2020, both Sony and Microsoft are scheduled to release their next-generation gaming consoles, and the likelihood is the devices will not sell cheap, at least when compared to the earlier models. Given the hardware upgrades planned for the PS5 and the new Xbox, the retail price should be no lower than $499.
That has to be the sweet spot for both consoles, which, according to their makers, will be packed with premium components. The PS5 and the Series X are touted to match the gaming capabilities of their PC counterparts, so it makes sense that would-be buyers expect to pay more than usual.
BGR said the $499 price point was linked mostly with the PS5, basing on the recent indicators from Sony that when the device becomes available the cost of ownership would not be prohibitive. The Japanese company said the PS5 would be a compelling reason for PS4 owners to make the jump, and the price tag should be a solid argument for them to do so.
Microsoft is not expected to veer too far away for tougher competition. Hence the souped-up Xbox should retail within the same territory.
The pricing, anyway, will be justified by what both the PS5 and new Xbox will unpack, among them custom CPU and GPU, GDRR6 RAM, and NVMe SSDs, all confirmed by Sony and Microsoft. These parts will afford the consoles superior gaming features such as 8K resolution, ray tracing, and super-fast game loading.
In other words, the rig promised for both platforms will be the most powerful ever, and building them is certainly not cheap.
The bill of materials (BOM) for the two machines will be higher than the previous generations, per the estimation shared by Niki Partners senior analyst Daniel Ahmad. Ahmad predicted it's too remote of a possibility to see any of the PS5 and Series X sell below $400.
"My point is the build cost of these next-gen consoles will be higher, meaning a sub $400 retail price would lead to a heavy loss per unit sold," ComicBook quoted the analyst as saying.
He noted though that console makers usually introduce their products at a price point that will result in initial losses but with provisions to gain profitability at a certain period. That was the case with the PS3, which had an introductory price of $500 but with a BOM of $800.
However, the report from Niki Partners said Sony started realizing profits with the PS3 only a few months after launch, and this might be the same case for the PS5, going by on the buzz that the next-gen console is already generating.
As mentioned, Sony and Microsoft will likely unveil the PlayStation 5 and the Xbox Series X in the early months of 2020, but the actual release date is not expected until later in the year, perhaps between November and December.
