Report: PlayStation 5 Costs $450 to Manufacture - PCMag.com

The PS4 launched back in 2013 for $399.99, with the PS4 Pro launching at the same price in 2016. However, the PS5 manufacturing cost is thought to be $450, leaving Sony with a difficult pricing decision for its next console.

As Bloomberg reports, the higher cost of manufacturing the PS5 is due to a number of factors. Top of the list is very high demand for the DRAM and NAND flash components every PS5 requires. Sony is competing for limited stock against all the major smartphone manufacturers preparing to launch their 5G phones later this year. Microsoft will also be attempting to grab its own share of the same stock for the Xbox Series X.

Sony is also thought to be using a relatively expensive cooling system for its new console. Gamers will be happy to hear Sony opted for a cooling solution ensuring better heat dissipation, but in so doing, the cost rose to a few dollars per console. Typically, cooling component cost less than a dollar per machine.

If $450 is the true manufacturing cost of the PS5, then Sony has a big decision to make later this year. It can try and sell the console at cost with a $449.99 price tag or see if the market can stand going to $469.99 and ensuring some profit. Alternatively, it could match the price of the PS4 Pro at $399.99, take a big loss on every console, and hope to quickly reduce manufacturing costs over the first couple of years.

The decision Sony takes on pricing will be guided to some extent by how Microsoft prices the Xbox Series X. Sony will be keen to at least match its rival, but may not be able to if Microsoft goes aggressive.

With the PS5 expected to launch before the end of the year, typically pricing is set before the end of February and before mass production starts in late March. However, Sony is thought to be waiting longer this time on setting a price.