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PS5 bombshell: vital parts shortage threatens wallet-busting price hike

The PS5 could end up being a lot more expensive than initially thought thanks to a potential shortage of parts, according to a new report. We're not expecting Sony's next gen console to be cheap, by any means, but sources close to the company have indicated that a PlayStation 5 price hike could be on the horizon thanks to the difficulty in getting hold of DRAM and NAND flash memory.

The manufacturing costs of the console are said to be $450 per unit, which is significantly higher than the PS4's estimated $381 cost per unit, according to IHS Markit, which went on to retail at $399. If the same markup is applied to the PS5, that would bump up the price to $470. Or the company could opt to take a loss on the hardware, and look to recoup the money through its software and subscription services.

The console is set to house a solid-state drive which will provide lightning-fast load times which Sony demoed last year, with the PS5 running a whopping 18 times faster than the PS4.

Cranking out a console with the parts capable of pulling that off is an expensive affair at the best of times but components shortages could inflate that cost. Happily, the looming threat of trade tariffs seems to have been dealt with, so neither Sony nor Microsoft should be hiking up price tags on the PS5 or Xbox Series X for that reason.

The PS5 reveal is set to happen before the end of the month, with Sony historically locking the pricing in by February, but it needs to remain competitive with Microsoft. Both consoles could also face delays in their launches due to the coronavirus situation, which may also have a knock-on effect on cost.

Industry analyst Damian Thong points out that "consumers will benchmark their expectations based on the PS4 Pro and PS4. If Sony prices above that, it would likely be to balance a need to offset higher materials cost, against risk to demand."

Earlier this month,  Sony’s Chief Financial Officer Hiroki Totoki said, "we must keep PlayStation 5’s bill of materials under our control and we need to make the correct number of units in the initial production."

With less than a year to go before launch, Sony should have already secured its supply of parts - something which sources confirm, but the only thing that hasn't been settled on is the number of units it'll churn out during the first year.

We only have a couple of weeks of February left, so we'll find out the price soon enough.

Source: Bloomberg

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