According to Sony’s senior EVP and CFO, Hiroki Totoki, the company hasn’t decided on the price of thePlayStation 5just yet because of a few unknown factors. From the way Totoki words his statement, it actually looks like Sony may be waiting to see howMicrosoft plans to price its upcoming Xbox Series Xbefore making its own decision.
Totoki’s allusion happened during Sony’s third-quarter call when he received a question asking for clarification on what factors Sony could control, and elaborate on the ones it can’t that are holding it back. Totoki was also asked how exactly he planned to achieve his aim of a"smooth transition," between the PlayStation 4 and the PlayStation 5.
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Totoki responded with a few things. Firstly, the company will obviously need to ensure that the personnel developing the PlayStation 5 and the resources used to build it are all covered. Determining how many PS5 units to prepare for its upcoming launch also plays a role in figuring out how to price it. These things, along with the marketing that will go into thePlayStation 5, like its logo, are all costs Sony has control over.
However, the company must balance these costs with the ones that it can’t foresee with thePlayStation, such as its competition with the Xbox. Totoki claimed that because Sony is “competing in the space,” it’s hard to discuss – let alone determine – the price tag of the PlayStation 5 at this time. This statement implies that Sony wants to know what Microsoft will price the Xbox Series X before it makes a final decision.
Sony has utilized this strategy in the past. One of the reasons thePlayStation 4 saw more success than the Xbox Oneback when the two consoles released initially was because it cost 399 in comparison to the Xbox One’s 499. Microsoft announced the Xbox One’s price first, leaving the PlayStation 4 enough room to undercut it by a hundred dollars, something that obviously appealed to people torn between the two consoles.
Totoki’s response to the PlayStation’s price doubled as his answer to the question about Sony plans to achieve a “smooth transition.” The smooth transition comment apparently just meant that Sony wanted to choose the most optimal pricing for the PlayStation 5 that both worked for fans of the console and ensured that Sony would be profitable during thePlayStation 5’s life span.
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