Are Ps5 and the Series X too cheap?

MS and Sony pushed each other to the $500 mark for the standard edition of their respective consoles. I think that’s a pretty fantastic price. It seems almost too cheap to me when comparing to other electronics. Just a couple of examples:

• iPhone 12 $799 (and up)
• Gtx 3080 $699

Given the limited supply they basically invite scalpers with this ridiculous price. I learned in school that price is set where supply meets demand. Well $500 is substantially below that imo.

Not to mention how cheap the games are with various services.

Should the big two have gone for a higher price point?

The console business about giving away the razor to sell the blades, if anything iPhones are overpriced and overrated.

Besides, consoles are in a slight decline, so they want to get these machines in the hands of any many people as possible.

$499 to me sounds excessive but what do I know.

most phones can be bought on a monthly plan and are heavily subsidized by the carrier if you have a contract so that $799 is a bit misleading

Graphics cards are an entirely different demographic that are targeted for those, people who spend thousands on their setup

Consoles are meant more for the common person so a higher price point would have stagnated sales IMO, maybe not at launch because you always get a % of people willing to pay anything for the new shiny hardware, but if the price is higher your potential market is smaller so the sell outs would be shorter. Right now they are forecasting supply problems into April, if the console was another $100 or $200 you will have parents rethink buying Johnny and Suzy one for Christmas. The person who has the PS4 and XB1 and are satisfied playing them will see less reason to buy the new console.

I personally think they hit the "sweet spot" for the premium versions of their consoles

The phones are how the the phone manufacturers make money. The consoles are just a vehicle for the service, accessory and software revenue in the console market. Of course if they can break even or turn a small profit on the consoles, great, but they really want them in as many hands as possible so that the consoles can THEN make them real money

So maybe the phone comparison was bad. But if something is selling out this rapid fast and scalpers are able to get a margin of, like 100 %(?), why not push up the price?

I bet Ps5 would be sold out at $700 too

yes but the market would be limited.. its demand would decrease very quickly and they would be forced to do a price drop within 6 months (my guess) that would not be a great look.

Plus $700 USD means the console becomes even more undesirable in other jurisdictions like Canada where it cost $629 for a PS5 right now.. that would probably change to around $829-850

I'd say they hit it right.

Next year around this time will be perhaps the perfect time to jump in for at least a $50.00 to $100.00 drop in price and hopefully including a nice bunduru as well. :P

Slight decline, but cannot stay in stock anywhere?

I think high end console will be attractive to a lot of consumers. Something that is future proof for 4-5 years and has real cooling solutions for all components. All while still getting the console plug and play experience, optimizations, and exclusives. This will be a real attractive package.

The console experience without the compromises that are out now.... while still having the cheaper option for those that prefer. Id be down for this.

That's normal at every console launch, it does not indicate long-term consumer demand.

@Sushiglutton: Seeing a single high-end PC component (RTX 3080) thrown as an example, well, it's like arguing that latest Ferrari engine (as in single component of a car) also costs way more than latest Honda Civic (the whole car), so...🙄

BTW, whoever keeps buying and supporting Apple products for the past decade is clearly willing to pay more for less anyway. Not quite a good example either.

/EDIT: Wording

The systems can't play any game in 60fps with RT, the only next gen feature there is. So no, not too cheap at all.

They are essentially low end PC's with a first party OS and bulk purchased under contract hardware with the cheapest capacitors, diodes, resistors, etc that can be had in bulk then all onto a single production lineup and packaging. So of course they're cheap.

Scalpers are artificially limiting supply by buying up a lot of the stock though

For consoles, they're expensive enough. Phones and PCs are more important to people, they can be used for more, so people will spend way more on them. There is a limit to how much people will spend on consoles and they have to drop price to get the wider audience interested. That's why they both released cheaper versions of the consoles.

The enthusiasts will pay top dollar for a console but they're more concerned with the average gamer. Their business is to sell software.

Only reason I got a Series S is because it was dirt cheap. They can go f**k themselves am I spending anywhere near £400 just to play games. But they still want me, because I'll buy software. And I'm not alone.

@sheevpalpamemes: it could be that Sony are pulling a Nintendo here though

Yeah. I would gladly pay a bit more if I didn't have to choose between visuals and performance.

Next-gen compromises

@getyeryayasout: Got to agree. Used to be when the new console launched, you could get the old one for about $100.

No. We’re in a pandemic. You’re lucky they’re the price they are.

Probably, but it was bound to be advantageous to the one who undercut the other, though Series S and all digital PS5 are interesting considerations. MS trying to make up for 8th gen probably couldn't afford to have a higher priced console in trying to reestablish its goodwill.

Is Apple a special case? I'm assuming that their software revenue from the phone eco heavily outweighs phone manufacturing profits. Their phones sounds just like the vehicle you mention.

@rzxv04: I suppose it is. They're kind of a hybrid of both. Greediest corp I can think of, too... but I suppose they can't sell it if others aren't buying it, so...

iphones and most phones in general are over rated af. I personally have never purchased a phone for the ridiculous price of $1000. I think phones shouldn't even cost more than $300.

About your point about raising the price, I think it wouldn't have made a difference. I mean, xbox has all access which allows you to make monthly payments. Even besides that, most people are used to paying with credit cards. The only way MS/Sony would have affected demand, is if they bumped up the price of their consoles to over $1000.

Your school learned you wrong then.

Those two examples aren't really the same to each other or, the PS5.

The iPhone 12 is a mass-market device but, it's subsidized by mobile providers. Not to mention it's basically considered an essential tool for a lot of people. More importantly, Apple is also not automatically making recurring revenue from each user. You can very much use an iPhone 12 and not generate additional revenue for Apple. They need to factor in a decent amount of profit in the price.

The GTX 3080 on the other hand needs to be priced higher because NVIDIA doesn't make any recurring revenue after you purchase the hardware. They need to recoup their R&D costs and, turn a profit.

The PS5 is a mass-market device but, it's very much a luxury item compared to a smartphone. The biggest difference between the PS5 and iPhone 12 is the fact that PlayStation is making recurring revenue from the vast majority of users whether it's physical games, digital games or, digital goods/services. They can afford to be cost neutral considering they'll make way more money off of people buying and using the hardware.

@Sushiglutton: Did you just compare consoles to phones? Seriously? Go back to school

My main point is that since scalpers are able to get a very high margin, Sony could have priced the ps5 higher and still easily sold out. While at the same made life a bit harder on the scalpers.

No, I don’t think so. If they were priced higher then that would also affect the general overall hype for the system. Pricing things higher just so scalpers might not make as much profit from selling them seems like extremely flawed logic to me.

Extremely flawed indeed. Couple the fact that the pandemic has gotten worse (almost 4k deaths a day now)...like c'mon? Also, the PS5 was already planned for a $499.99 release from what I read.

Yes they are way too cheap. I want a premium PS5.

$499 gets you a 10.52Tf GPU / 825GB SSD

$999 should get you a 21Tf GPU / 1.65TB SSD