Sony Confirms No Cheap Consoles: Production Costs Will Increase and Prices Will Rise Over Time

The PS5 has represented a price leap that Sony never intended to offer. The Japanese company always aimed to sell its consoles at reduced and affordable prices. Indeed, since the launch of the PS5, it has been selling at a loss. This situation will not improve, according to Hiroki Totoki, who openly admitted that it is becoming more challenging to increase profits with each generation and that the lifecycle no longer reduces costs. As a result, inexpensive consoles are a thing of the past for Sony and its upcoming generations.

The PS5 is about to be pushed into the background as the PS5 Pro takes center stage. However, the Japanese company sees a murky outlook regarding costs versus benefits, causing fluctuations in the console’s prices. Sony’s revenue situation will not improve; in fact, it will worsen. Hence, they have to open up to the PC market with their games since every euro earned counts.

During an investor call in Japan, Sony Interactive Entertainment’s chief, Hiroki Totoki, addressed the issue of console costs now that it is halfway through its lifecycle, surprising everyone. He candidly stated that it is harder to reduce the size of the PS5 than its previous counterparts. Consequently, reducing the manufacturing cost to make it more affordable, like with the PS4, is highly unlikely.

If you can’t reduce costs because shrinking component sizes to use less material in total is “very difficult,” you have a problem. The console offers no room for maneuver, and the SLIM version is a clear example of this in a time where component prices are rising.

The issue of new SoCs with GAA and CFET transistors and next-generation nodes comes into play. The cost of various lithographic nodes stopped declining at 28 nm and only began to decrease again at the current 3 nm nodes. The forecast for nodes below that is that costs will rise, and therefore, AMD’s SoCs will be more expensive, even if they are smaller and more efficient.

Additionally, there is the matter of cost per transistor. As we transition from FinFET to GAA and later CFET, nodal advantages are decreasing as it becomes more difficult to add density, speed, and increase efficiency. Predictions indicate that each chip will have a smaller performance leap and higher prices.

In other words, the era of affordable consoles for Sony and Microsoft is over once the 3 nm mark is passed. AMD’s SoCs, or Intel in some cases, will be pricier and will not offset the performance increase and possible consumption. As a result, they will once again have to find a balance. This means that Sony won’t be able to make significant performance jumps between consoles and that reducing costs is virtually impossible, even when the console is about to be discontinued.

Will we see future PlayStations priced above €700 soon? How will Sony manage to sell them without suffering losses and return to the profitability of the past? Finally, do you think launching their games on PC is a powerful enough move?