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This pricing was inevitable and Sony very likely taking a loss to stay competitive with Xbox Series X. Microsoft had first mover advantage and set the price flo

This pricing was inevitable and Sony very likely taking a loss to stay competitive with Xbox Series X. Microsoft had first mover advantage and set the price floor + ceiling with their earlier announcements. The question becomes how large of a loss per console and how long will it take for Sony to recoup?

sbuccini 6y ago
When it comes to console pricing, there is no such thing as "first-mover" advantage. In fact, it's much more advantageous to be the _last_ company to price your console. I wrote a bit about the dynamics here: https://www.stevenbuccini.com/console-wars https://www.stevenbuccini.com/console-wars but I would also recommend playing MIT's simulator to develop an intuitive feel for the forces at play: https://mitsloan.mit.edu/LearningEdge/simulations/platform-wars/Pages/default.aspx https://mitsloan.mit.edu/LearningEdge/simulations/platform-w...
- pansa2 6y ago
  Yes. There’s a reason both companies kept their prices secret until so close to release, and we heard nothing until a leak forced Microsoft’s hand.
- cutety 6y ago
  My favorite “console wars” story that I came across a while back, and is relevant to pricing advantage, is when Sony more-or-less immediately killed the Sega Saturn before it’s US release. Right after Sega’s E3 presentation announcing the Saturn, US release date, and it’s $399 price tag, it was Sony’s turn. The guy from Sony walked up to the mic, said “$299”, and walked off stage. [1] [1] https://youtu.be/ExaAYIKsDBI https://youtu.be/ExaAYIKsDBI
wmf 6y ago
Do you think the less-powerful PS5 costs more to make than the Series X? Why?
- dlp211 6y ago
  Cost is not just about processing power. There are some real hardware innovations going into the PS5 that won't be in the XsX.
  - Scaevolus 6y ago
    Like what? They have very similar specs, with the Xbox appearing to have a slight edge in GPU performance, and the PS5 having a slight edge in SSD speed.
    - dlp211 6y ago
      Their SSD is not just an NVME gen 4 drive, but includes hardware to decompress textures and other game assets as they stream in. It's going to let the PS5 do a bunch of stuff that the XsX won't be able to. Also, the controller with its haptic feedback is supposed to be a significant step up and Sony had originally had a huge in person marketing and promotion event around the controller that COVID messed up.
      - Scaevolus 6y ago
        XsX has hardware decompression engines too (zlib + bcpack) along with sampler feedback streaming, though PS5 does still have the edge on maximum SSD bandwidth and can pull assets more quickly. How much that increase in bandwidth will actually affect games is hard to predict. Some devs on twitter were claiming that it's a bit easier to hit 4K60 on XsX.
      - awill 6y ago
        >>Their SSD is not just an NVME gen 4 drive, but includes hardware to decompress textures and other game assets as they stream in. It's going to let the PS5 do a bunch of stuff that the XsX won't be able to Are you sure that's completely true? They've said they'll let you install your own PCIe4 SSD providing it meets some perf requirements.
- paulpan 6y ago
  A couple of major reasons compared to the Xbox Series X: - Sony's CPU + GPU are slightly higher clocked than Microsoft's, which typically means special binning required and increases costs (Bloomberg story collaborates on this: https://www.bloomberg.com/news/articles/2020-09-15/sony-is-said-to-cut-ps5-forecast-by-4-million-due-to-chip-woes https://www.bloomberg.com/news/articles/2020-09-15/sony-is-s...) - Proprietary storage system, super fast but R&D dedicated to design and implement it Ultimately both companies losing money on these initial sales but it seems Sony losing more than Microsoft.

sbuccini 6y ago

When it comes to console pricing, there is no such thing as "first-mover" advantage. In fact, it's much more advantageous to be the _last_ company to price your console. I wrote a bit about the dynamics here: https://www.stevenbuccini.com/console-wars https://www.stevenbuccini.com/console-wars but I would also recommend playing MIT's simulator to develop an intuitive feel for the forces at play: https://mitsloan.mit.edu/LearningEdge/simulations/platform-wars/Pages/default.aspx https://mitsloan.mit.edu/LearningEdge/simulations/platform-w...

pansa2 6y ago
Yes. There’s a reason both companies kept their prices secret until so close to release, and we heard nothing until a leak forced Microsoft’s hand.
cutety 6y ago
My favorite “console wars” story that I came across a while back, and is relevant to pricing advantage, is when Sony more-or-less immediately killed the Sega Saturn before it’s US release. Right after Sega’s E3 presentation announcing the Saturn, US release date, and it’s $399 price tag, it was Sony’s turn. The guy from Sony walked up to the mic, said “$299”, and walked off stage. [1] [1] https://youtu.be/ExaAYIKsDBI https://youtu.be/ExaAYIKsDBI

wmf 6y ago

Do you think the less-powerful PS5 costs more to make than the Series X? Why?

dlp211 6y ago
Cost is not just about processing power. There are some real hardware innovations going into the PS5 that won't be in the XsX.
- Scaevolus 6y ago
  Like what? They have very similar specs, with the Xbox appearing to have a slight edge in GPU performance, and the PS5 having a slight edge in SSD speed.
  - dlp211 6y ago
    Their SSD is not just an NVME gen 4 drive, but includes hardware to decompress textures and other game assets as they stream in. It's going to let the PS5 do a bunch of stuff that the XsX won't be able to. Also, the controller with its haptic feedback is supposed to be a significant step up and Sony had originally had a huge in person marketing and promotion event around the controller that COVID messed up.
    - Scaevolus 6y ago
      XsX has hardware decompression engines too (zlib + bcpack) along with sampler feedback streaming, though PS5 does still have the edge on maximum SSD bandwidth and can pull assets more quickly. How much that increase in bandwidth will actually affect games is hard to predict. Some devs on twitter were claiming that it's a bit easier to hit 4K60 on XsX.
    - awill 6y ago
      >>Their SSD is not just an NVME gen 4 drive, but includes hardware to decompress textures and other game assets as they stream in. It's going to let the PS5 do a bunch of stuff that the XsX won't be able to Are you sure that's completely true? They've said they'll let you install your own PCIe4 SSD providing it meets some perf requirements.
paulpan 6y ago
A couple of major reasons compared to the Xbox Series X: - Sony's CPU + GPU are slightly higher clocked than Microsoft's, which typically means special binning required and increases costs (Bloomberg story collaborates on this: https://www.bloomberg.com/news/articles/2020-09-15/sony-is-said-to-cut-ps5-forecast-by-4-million-due-to-chip-woes https://www.bloomberg.com/news/articles/2020-09-15/sony-is-s...) - Proprietary storage system, super fast but R&D dedicated to design and implement it Ultimately both companies losing money on these initial sales but it seems Sony losing more than Microsoft.