That the PS5 is not profitable for Sony is an open secret. With each launch of a next-generation console, the return on investment, development and manufacturing costs it is always calculated in the long term.
In the case of the PS5, taking into account only the manufacturing costs of the console, and paying attention to some sources somewhat specific, it should be sold to 470 dollars so that the cost of sale was equal to the cost of manufacturing it. That putting aside R&D costs and investments made by Sony during the years when the console was a mystery to the end public.
It has been like this with almost every generation of consoles. However, everything seems to indicate that with the PS5, Sony will reach profitability next June. So indicates the company itself in a report to investors, in which it calculates that each console sold will be profitable in a few weeks.
Keep in mind that the profitability referred to by Sony is for the standard model, that is, the one with a disc player. Although the margin of each unit sold is unknown, the mere fact that the console includes a 4K Ultra HD Blu-ray reader, forces Sony to pay up to $ 8 per console in licenses.
That makes, with such tight margins at launch, it is more difficult to reach the profitability of the standard model of the console, no matter how much its sale price is 100 dollars higher than the digital one. Something simpler for the digital-only model, due to the absence of the inclusion of a reader and its electronics, and associated special licenses.
It doesn’t matter that the PS5 isn’t profitable (now) for Sony
Logically, the fact that a console is not profitable at launch matters little. In the medium term, economies of scale lower the manufacturing price for each final unit.
On the other hand, game licenses, sales commissions per title and associated services are not only sufficient to cover development costs and intangibles, but also They are an industry by itself that represents income far above the sale of hardware itself.
And since consoles are long-term bets, with an average of 6-7 years per generation, plus previous (and amortized) consoles sold in the next generation, the profitability of a model like Sony’s, In an industry like the video game, it is more than guaranteed. Not to mention the unprecedented success of each console that the Japanese company puts on the market each year.
