PS5 will no longer be sold at a loss since June
PS5 Standard will reach break even in June 2021, or next month, so this means that it will no longer be sold at a loss but the production costs will be exceeded by the selling price, thus starting to generate profits for each unit sold.This is news of enormous importance for Sony, which in fact highlighted it during the recent conference dedicated to investors, also for the speed with which the critical quota for the transition to profit was reached.
Since this is still very new hardware, it is remarkable that production costs have already dropped within a few months, reaching break even 6 months after its release on the market, even if obviously the production of the console started earlier, about a year ago.
The achievement of the critical transition point is well summarized in the slide below: you can see how from June 2021 onwards the production costs and are destined to remain below the PS5 selling price and continue to fall steadily, consequently increasing margins for Sony.
PS5 Standard will reach break even in June 2021. The information in question relates to the PS5 Standard model, the one equipped with an optical reader. The latter thing more in terms of production as it mounts the Blu-ray player, whose presence also requires the payment of a fee of about 8 dollars for each device sold. However, it must also be said that it costs 100 dollars more as a market price, so it is not easy to deduce what the position of PS5 Digital Edition is instead.
The digital version of PS5, without an optical player, obviously cuts the cost of the player itself and the tax on optical media, but by costing $ 100 less it could prove to be more "expensive", in absolute terms, and therefore not yet close to break even, although it would probably still be a matter of months for this model as well.
In the same conference, the desire to bring Uncharted 4: End of a Thief to PC also emerged, in addition to the fact that Returnal for PS5 is considered a success by Sony.
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Sony Claims PlayStation 5 Disc Edition to No Longer be Sold at a Loss Starting in June - News
by William D'Angelo , posted 12 hours ago / 1,126 ViewsSony Interactive Entertainment in its Game & Network Services Segment of Sony Group’s Investor Relations Day has claimed the standard edition of the PlayStation 5, which comes with a disc drive, will break even and no longer be sold at a in June.
'Another area that we focused on is our console economics,' said Sony Interactive Entertainment president and CEO Jim Ryan during the event. 'I’m pleased to say that the PS5 standard edition will break even from next month’s production. And from then on, we project that it will gradually become increasingly profitable.'
Ryan added that the PlayStation 5 standard edition is the majority of PS5 sales and he does not see that changing much in the current fiscal year, which ends March 31, 2022.
'The standard edition represents the very great majority of PlayStation 5 sales,' said Ryan. 'We do not see that proportion changing greatly in FY21. But we anticipate as time passes, as we move further into the cycle of PS5, that there will be some slight increase in the ratio of the digital edition, but not significant.'
The PS5 with a disc drive is priced at $499, while the PS5 Digital Edition is priced at $399 and does not include a disc drive.
The likely reason Sony doesn't mention the Digital Edition will break even in June is due to it being $100 cheaper, but the removal of the disc drive is not enough to bring down the cost of the console by the same amount.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.