£70 - The "New Normal" for next generation games?

[SDK^]

Cheap consoles = expensive games
The alternative would be to pay the full, non loss making price, plus the built in profit for the system. Much like PC users - anyone fancy paying £1k+ for a PS5 or XBox SX?

There aren’t many people complaining about the cheap next gen system prices

 

[DeliciousStorage]

Cheap consoles = expensive games
The alternative would be to pay the full, non loss making price, plus the built in profit for the system. Much like PC users - anyone fancy paying £1k+ for a PS5 or XBox SX?

There aren’t many people complaining about the cheap next gen system prices

£1k+, so you think they are making a £550 loss on a £450 console? There is no way they are making any kind of significant loss on the console hardware, if at all. The PS4 was profitable for Sony on a hardware unit basis not long after release. Consoles are so cheap primarily because Microsoft and Sony are able to negotiate very thin margins from AMD due to the sheer number of chips they order. If they had even made a £50 loss on the hardware it would have cost Sony £5 Billion for 100 Million PS4's.

 

[SDK^]

£1k+, so you think they are making a £550 loss on a £450 console? There is no way they are making any kind of significant loss on the console hardware, if at all. The PS4 was profitable for Sony on a hardware unit basis not long after release. Consoles are so cheap primarily because Microsoft and Sony are able to negotiate very thin margins from AMD due to the sheer number of chips they order. If they had even made a £50 loss on the hardware it would have cost Sony £5 Billion for 100 Million PS4's.

Of course they are sold at a loss. There is more to factor into the cost that just the hardware, unless the whole Sony team are working for free

The PS4 was sold at an $18 'profit', compared to the actual hardware cost : https://www.engadget.com/2013-11-19-ps4-costs-381-to-make-according-to-hardware-teardown.html
That doesn't factor into account any R&D, manufacturing, labour or marketing costs.

As for the PS3 - probably at your £5bn estimated loss for the first few years.

Sony Computer Entertainment CEO Andrew House said in August that the system "will not generate anything like the losses we did for the PlayStation 3," which amounted to $3.5 billion in 2007 and 2008, after the PS3 launched in November 2006 for $599. IHS' teardown of the PS3 at the time found that the system cost Sony $805, and the company still lost roughly $40 per system as of December 2009.

 

[Philz0r]

i very rarely buy games at release and pretty much buy all my games digitally from what ever looks good in the sales.

to answer your question if it put me off the console, yes it has, for now at least.

 

[DeliciousStorage]

Of course they are sold at a loss.

The PS4 was sold at an $18 'profit', compared to the actual hardware cost : https://www.engadget.com/2013-11-19-ps4-costs-381-to-make-according-to-hardware-teardown.html
That doesn't factor into account any R&D, manufacturing, labour or marketing costs.

As for the PS3 - probably at your £5bn estimated loss for the first few years.

I see you edited it from $18 loss to $18 profit. Here's Sony's CEO saying that the PS4 hardware was profitable shortly after release.The PS3 was an exception, I doubt Sony will be making that mistake again, but even that was a long way away from a £550 loss according to your £1k+ figure.

 

[Reuben klang]

Only £70 if you're one of these people that goes all digital. Personally I'll be sticking to buying and selling my games on disc. And buying the odd game digitally if I see one I want on sale.
The justification that "games cost more to develop" would have been fine IF virtually all games are filled to the brim with micro transactions.

I completely agree with you.

 

[BuffetSlayer]

Only £70 if you're one of these people that goes all digital. Personally I'll be sticking to buying and selling my games on disc. And buying the odd game digitally if I see one I want on sale.
The justification that "games cost more to develop" would have been fine IF virtually all games are filled to the brim with micro transactions.

I'm all digital, and as a percentage I would say I have only paid full price for approximately 15% of my library. That library, across x1x and ps4 is about 300 titles, half of which are freebies. So about 23 titles across both platforms since 2014 where I have paid full price, give or take - 4 games a year. Most times I pay less than £20 a title.

But I am happy to wait for sales, as I have so many games still left to play! I accept it doesent work for everyone though.

Digital works for me given the low percentage of full price titles vs sale price. For those who must have the latest titles on release, disc is definitely the most cost effective option.

 

[VortexA1]

Regarding digital it always seemed like they should be priced lower than physical given the resale value/lost sales and that Sony doesn't have any distribution/delivery costs nor do they have to give resellers a cut. It always seemed like the price equality was simply there to placate resellers to make sure they stock their consoles, peripherals and games.

I agree it seems like nothing more than Sony being opportunistic with the release of a new console. I'm sure increased revenues will massively offset any minor hikes in development costs they have for developing PS5 games.

Yep, it's exactly that; that digital game sales cost more - because of physical shops /making sure they stay in business.

 

[VortexA1]

I see you edited it from $18 loss to $18 profit. Here's Sony's CEO saying that the PS4 hardware was profitable shortly after release.The PS3 was an exception, I doubt Sony will be making that mistake again, but even that was a long way away from a £550 loss according to your £1k+ figure.

Well '£18 profit' isn't a profit is it.. An item produced also has to earn the company enough money on an individual level so that it goes towards covering all their costs otherwise they're not making a profit! Yes it's a profit on paper which is what Sony's CEO said but then surely when you factor in the initial R&D, then the manufacturing, also the distribution , the labour and marketing costs (£Millions) as 'a poster put' £ 18 isn't actually a profit is it! They would have been running with heavy deficit of £Millions from the get go and not covering their costs with each console surely. Fortunately they're a massive company so that they have their lots and lots of financial resources behind them.

Also without looking at stats I reckon all the console releases from PS1 onwards were initially sold at a loss, I've read many times that consoles initially lose money.

I've just read : Sony has confirmed that the PS4 was sold at a loss at launch. Now how long before this '£18' was factored in which I spoke on I haven't looked ; we're looking at the initial launch of the PS5 so historically it will be sold absolutely at a loss.

Just read this which just reiterates my reasoning: "Sony's PS4, which launched at $399, cost $381 to make. After factoring in marketing, shipping, and other operating costs, Microsoft and Sony likely lost money on each console sold."

I would say highly likely!

I just read your link : it says this: Sony ended its fiscal year( which was the launch year)of the PS4 with a net loss of $1.26 billion.

 

[biron_w]

Yep, it's exactly that; that digital game sales cost more - because of physical shops /making sure they stay in business.

No no no! I'm honestly fed up of people saying that digital costs more because of physical. It's utter nonsense. If it all went digital tomorrow do you honestly think that game prices would suddenly come down? Because I would bet my entire years wages that they wouldn't. Digital games cost what they do purely down to publisher greed. It's as simple as that.

 

[MissChief]

No no no! I'm honestly fed up of people saying that digital costs more because of physical. It's utter nonsense. If it all went digital tomorrow do you honestly think that game prices would suddenly come down? Because I would bet my entire years wages that they wouldn't. Digital games cost what they do purely down to publisher greed. It's as simple as that.

Agreed. When you can buy a physical disc from Amazon for a few quid less than RRP despite shipping and production costs, which digital games just don’t have, it tells you the price for digital copies includes more profit.

 

[Jase]

I'd prefer not to pay £70 for the games but I have no objection to it for a good game, it may make me a little more selective in what I purchase which would actually save me money as I look at all the un-played games I have

 

[malachi]

Nope, I wont be.

The most I ever paid for a game was £60 for Donkey Kong 64 back in 1999 and that was because it included the Expansion Pak.

Games do cost more to produce but digital distribution should be taken into account and its not. Combined with micro-transaction too, no need for them to be £70. Some cases you only get half of the game and the rest is paid for DLC.

 

[stoofa]

Of course digital games are more expensive because the prices are set by the publisher, which means RRP until the publisher says that price can be discounted.
With a physical game a retailer buys the item and can decide what to sell it for and can decide when the item can be discounted.

I still get frustrated that people see the pricing the "wrong way around". It isn't digital being a lot more expensive, rather physical being cheaper.
It's a subtle difference, however digital is publisher set RRP, physical is retailer set price based on acceptable profit margins.

 

[glenimp617]

This is why I'm moving from digital to disc this generation

 

[DIABLO]

It would put me off buying digital games yes, but I buy physical games on release and complete as fast as possible and then flip them so the price increase is no big deal for me. I only buy digital for sub £20 games.

 

[CaptainRAVE]

I wouldn't pay £70 for one game. £89 got me game pass for 3 years. I may buy the occasional new release game on the X that seem to be £45-50.

 

[Scort]

Cheap consoles = expensive games
The alternative would be to pay the full, non loss making price, plus the built in profit for the system. Much like PC users - anyone fancy paying £1k+ for a PS5 or XBox SX?

There aren’t many people complaining about the cheap next gen system prices

I'd be happy to pay this mystical full price, if it meant games were £35-45 quid a pop; as I buy a lot of games over the lifetime of the console - so a higher outlay on the console wouldn't be an issue to me.

This £70 for games just seems like a mad jump - I might stomach £55, but they really need to reign in the cost of DLC and in-game stores.

 

[DeliciousStorage]

I just read your link : it says this: Sony ended its fiscal year( which was the launch year)of the PS4 with a net loss of $1.26 billion.

Sony make more than games consoles, it doesn't say that their games division made a loss.

Well '£18 profit' isn't a profit is it.. An item produced also has to earn the company enough money on an individual level so that it goes towards covering all their costs otherwise they're not making a profit! Yes it's a profit on paper which is what Sony's CEO said but then surely when you factor in the initial R&D, then the manufacturing, also the distribution , the labour and marketing costs (£Millions) as 'a poster put' £ 18 isn't actually a profit is it! They would have been running with heavy deficit of £Millions from the get go and not covering their costs with each console surely. Fortunately they're a massive company so that they have their lots and lots of financial resources behind them.

I'd call that a profit! What you really need to look at is the average profit throughout the lifetime of the console to determine whether they are loss making or not. They could well sell them at a small loss at launch but overall still make a reasonable profit on the hardware throughout it's lifetime, for example I believe the PS4 Pro hardware in the last few years has been very profitable for Sony. This price hike doesn't have anything to do with Sony needing to increase prices for a loss making console, it's the publishers that set the prices. I very much doubt Sony would be increasing their usual cut which is believed to be around 30%.

 

[eggyoke]

Big nope from me. It's actually made me sour over the PS5. I was planning on getting one next year sometime but I'm now seriously considering XSX and game pass (especially with the Bethesda acquisition.) I think there's going to be a lot of parents buying the Digital PS5 for their kid not knowing that the standard price for games is £70, and that they can't shop anywhere else.