Xbox Series X and PS5 Price Expected to Be $500 at Launch; Lower Price Unlikely Due to Scarce Components – Rumor

Feb 14, 2020
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The prices of both the Xbox Series X and PS5 are expected to be $500 USD when the console's launch later this year, according to industry analysts.

A new report from Bloomberg claims that Sony is struggling with the next-gen console’s pricing due to its components being rather scarce. According to the publication, manufacturing costs of the PS5 have been pushed to around $450 per unit, suggesting that the console’s retail price should be at least $470 to have a similar gross margin. Since Sony is currently selling its most powerful console, the PS4 Pro, at $399 or less, this will be a steep price for many consumers.

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“Consumers will benchmark their expectations based on the PS4 Pro and PS4,” Macquarie Capital analyst, Damian Thong, said. “If Sony prices above that, it would likely be to balance a need to offset higher materials cost, against risk to demand.”

Well-known industry analyst at Niko Partners, Daniel Ahmad, has now taken to Twitter to comment on Bloomberg’s report and has said that what has been claimed in the report is fairly accurate. “Build cost is not the retail price”, the analyst tweeted. “As the article states, a $450 build cost would probably result in a retail price close to $500.”

“I think at this point it’s unrealistic to assume we’ll get a high-end console at $399 like last gen.”

Ahmad added, “The PS4 was sold at a loss on day 1. Its total build cost was $381, but the additional costs involved such as retailer margin etc... pushed the total cost for Sony over $399. Took a few months for them to make a profit on that price.”

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The $499 price tag for both the PS5 and Xbox Series X also seems to be supported by independent videogame industry analyst @BenjiSales. “But as I've been speculating on here and YouTube for months, next-gen consoles coming in at $399 is highly unlikely”, he wrote on Twitter following Ahmad’s tweets.

Earlier this year we already reported on the pricing of both consoles, which will likely have a similar price tag. "Both consoles will be a lot more similar to each other in terms of specs, pricing and features when compared to the last generation", Katan Games analyst, Serkan Toto, said. "Microsoft will likely avoid shenanigans like higher price (I expect $499 price tags for both), weaker specs, restrictions to used disc sales etc. I also expect no handheld versions, a PSVR 2, and only a single device (instead of a PS5 standard and Pro, for example) for both companies at launch."

What are your thoughts on the price tag of both the PS5 and Xbox Series X? Will Sony and Microsoft opt for a lower price point? Can you agree with a $499 price tag? Let us know below.

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