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[cormack12]

Source: https://www.retbit.com/2021/05/27/standard-edition-ps5-will-become-profitable-next-month-sony-says/


“Another area that we focused on is our console economics,” explained SIE president and CEO Jim Ryan in an investor relations presentation on Thursday. “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 in a Q&A session after the presentation that, “Right now, the standard edition represents the very great majority of PlayStation 5 sales. We do not see that proportion changing greatly in FY21 but we anticipate that 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.”

 

[acm2000]

theyre hopeful, i'll give them that, what with all the global issues around anything chip related atm.

 

[TBiddy]

Say what you want about how the PS5 looks, but it's a goddamn impressive piece of engineering. I'm impressed they are already breaking even on the hardware. The profit train isn't stopping any time soon.

 

[ZehDon]

A testament to the engineering team that they've built such an advanced console that can become net profitable in a relatively short period of time. Hats off, really.

Ryan's comments about the DE are interesting, though. It seems Sony really doesn't expect it to do all that well, and seems its likely just there for marketing ("Get your PS5* from $399*" kinda stuff).

 

[supernova8]

When he says the standard edition represents the very great majority, I wonder if that's because more people want the disc version or because they simply made more disc versions.

My gut says people want a disc version but we cannot be sure without numbers.

 

[longdi]

say what you want about the DE and its bang for bucks, but as some of us have spoken, the $399 is more a marketing target than production target.

It is a ghost sku.

 

[vaibhavpisal]

IMPORTANCE OF CONSOLE IN BUSINESS MODEL IS REDUCING

Interesting deduction by Sony. Sounds a lot like Microsoft.

Now that companies are evolving, will the fanboys too?

Or will they maintain their rabid, feral nature?

 

[FatKingBallman]

So, it was true then like it was said around year and a half ago. PS5 Disc BOM is 450$, with shipping cost, retailer cut, taxes.

 

[ANIMAL1975]

A testament to the engineering team that they've built such an advanced console that can become net profitable in a relatively short period of time. Hats off, really.

Ryan's comments about the DE are interesting, though. It seems Sony really doesn't expect it to do all that well, and seems its likely just there for marketing ("Get your PS5* from $399*" kinda stuff).

say what you want about the DE and its bang for bucks, but as some of us have spoken, the $399 is more a marketing target than production target.

It is a ghost sku.

It's not just a marketing thing, look at the share in revenue structure in OP _ the digital sales ratio has greatly increased in this past generation, and has passed the revenue of boxed games by a large number in some cases, if not all.
Well i for one (and i bet many people too) im willing to wait for the DE because a) it's 100 euros cheaper b) I've been all digital for years (only 3 boxed games and all bought in first year of launch).

IMPORTANCE OF CONSOLE IN BUSINESS MODEL IS REDUCING

Interesting deduction by Sony. Sounds a lot like Microsoft.

Now that companies are evolving, will the fanboys too?

Or will they maintain their rabid, feral nature?

Those numbers reflect the reality of those 50m psplus subs we got in the other thread.
But don't forget, those numbers come from 2 major reasons _ multiplayer pay wall, and more than 110 million ps4 sold and counting _ in Sonys current business model, without the success of those hardware sales, there wouldn't be those 50m psplus subscribers to get that revenue numbers.

 

[MastaKiiLA]

Is this the fastest any PS unit has become profitable? I mean, the MSRP helps a lot, but that's a quick turnaround. It means they can crank up production without bleeding too much.

 

[skit_data]

This seems very early for the Standard Edition to break even. Before launch the speculations around BOMs seemed to suggest Sony priced the Standard Edition above its BOM and the Digital Edition quite a lot under.

I think this supports that notion. It’s possible they also include cost of logistics (which has been sky high last year).

Well, as long as demand is this large they likely won’t change their production line to make even more Digital Editions. Having a very high demand, profitable product is probably too tempting to swap it for a 50-50-split between the two models.

 

[ZywyPL]

IMPORTANCE OF CONSOLE IN BUSINESS MODEL IS REDUCING

Interesting deduction by Sony. Sounds a lot like Microsoft.

Now that companies are evolving, will the fanboys too?

Or will they maintain their rabid, feral nature?

I wouldn't expect that. All gaming companies have repeated over and over in the past decade how much profit the downloadable add-ons and services bring as oppose to just the copies sold, they are showing all the graphs and percentages every fiscal quarter, and yet fanboys always go with the same outdated, decades old logic that games sales=everything, often searching for excuses why an exclusive title didn't sell well, or why it doesn't matter a game on the opposite platform did really good. Which makes extremely entertaining to see the outrage when their beloved companies go completely against those fanboys and their believes, that recent petition to fire Ryan is some next level comedy and best example why fanboyism should've been qualified by WHO as a mental disorder long time ago.

 

[Amiga]

likely because component prices are falling. faster SSDs are now in the market. Sony don't have to pay the same premium any longer. cost probably down $$30-$50 on that one part alone.

A testament to the engineering team that they've built such an advanced console that can become net profitable in a relatively short period of time. Hats off, really.

Ryan's comments about the DE are interesting, though. It seems Sony really doesn't expect it to do all that well, and seems its likely just there for marketing ("Get your PS5* from $399*" kinda stuff).

I think the DE is the reason digital prices stay high for longer. I think I trapped myself with it.

 

[Krappadizzle]

Now get your ass in gear normalizing supply and fighting scalpers.

 

[mckmas8808]

IMPORTANCE OF CONSOLE IN BUSINESS MODEL IS REDUCING

Interesting deduction by Sony. Sounds a lot like Microsoft.

Now that companies are evolving, will the fanboys too?

Or will they maintain their rabid, feral nature?

I don't think that means, what you think it means.

 

[azertydu91]

I'm not so sure I want a ps5 with std even if it's cost effective.

 

[ethomaz]

Is this the fastest any PS unit has become profitable? I mean, the MSRP helps a lot, but that's a quick turnaround. It means they can crank up production without bleeding too much.

Same time as PS4.
Sony said they start to break even in June 2014.

 

[Evilms]

 

[skit_data]

I'm not so sure I want a ps5 with std even if it's cost effective.

It’s OK, you can clean it using the dust catchers