Yesterday’s PS5 Pro announcement wasn’t a surprise. What’s surprising is the price: at $699.99, it debuted as Sony’s most expensive console ever. It brought back memories of the controversial price tag of the PS3, a console that when adjusted for inflation was the same $779 price point as a PS5 Pro with an additional disc drive. It’s a very expensive PlayStation, and I fear it’s a test of what’s to come for next-gen console pricing.
For years, console gamers have been accustomed to purchasing hardware at significantly reduced prices compared to what you can make in the PC gaming space. Yes, you can find parts that match the PS5 or Xbox Series X on paper, but it’s still hard to reach the prices the consoles are selling for, especially when they’re discounted during promotions. Additionally, the easy plug-and-play model, simplified UI, and hassle-free warranty process are all huge benefits over having to build or find a nice prebuilt PC and then deal with Windows updates and driver. Consoles sell in their millions because they are easier to use than PCs.
It increasingly feels like the gap between console and PC is blurring, though. Both Microsoft and Sony have pushed this current generation in the direction of having the kind of CPU, storage, and GPU power you’d find inside a gaming PC. PS5 and Xbox Series X / S have better CPUs for gaming instead of underpowered laptop-like ones and improve the performance of your existing library of games like a GPU upgrade on the side of pc. That’s why I called the Xbox Series X a next-gen PC when I reviewed it in 2020.
The PS5 Pro shows that trend even more clearly. Sony’s entire selling point is a $700 upgrade for existing and new games to reach better frame rates while maintaining visual quality. That’s been the selling point of GPUs for decades, and now Sony will test whether console gamers are willing to upgrade their hardware the same way PC gamers build new rigs.
The big difference this time is that Sony wants you to pay for that upgrade in the same way that PC gamers have gotten used to GPU price hikes over the years. Both Sony and Microsoft typically sell consoles at a loss initially in order to subsidize the hardware and grow the market for next-gen systems. These initial hardware losses are usually covered by digital game revenues and in-game purchases.
PS5 Pro is all about digital sales, shipping without a disc drive. Sure, you can buy one separately ($79.99), but if you don’t bother, Sony will benefit from this digital sales push and the 30 percent cut it gets on most purchases. Microsoft and Sony are both pushing towards a discless future for consoles, and it seems likely that next-gen systems won’t ship with disc drives as standard. Hopefully you can still buy one separately, though.
Next-gen consoles also seem to be more expensive than what we’re used to. Component costs aren’t coming down, the console market isn’t growing, and Microsoft Xbox chief Phil Spencer admitted earlier this year that subsidizing hardware is now difficult because of the price of components. is not decreasing fast enough.
Last year, a Microsoft document revealed that the company planned to subsidize the Xbox Series X and S to the tune of $1.5 billion in 2021 to reach its target prices of $499 and $299, respectively. “That’s our biggest hardware subsidy ever” in Microsoft’s profit and loss for its gaming division, the document revealed. With Xbox Series S / X sales still lagging the PS5, it’s unlikely that Microsoft will gamble again on highly subsidized Xbox hardware for its next-generation consoles.
It appears that Sony is at the point of less subsidizing its PlayStation consoles. The lack of a disc drive helps keep console costs down for Sony in both the PS5 Slim and Pro models. The PS5 Pro’s pricing also seems designed to make a profit from day one, rather than months or years later. It took Sony nearly a year to stop selling the $499 PS5 at a loss, and then the company raised PS5 prices outside the US a year later to cover inflation and component costs. In 2022, PS5 prices jump 10 percent in Europe, 12.5 percent in Japan, and around 6 percent in the UK. Sony has raised PS5 prices in Japan three times since the console launched in 2020.
More importantly, Sony has yet to raise the price of the PS5 in the US, a market where it still faces competition from Xbox sales. Microsoft admitted last year that it had a 20 percent market share in Europe, compared to Sony’s 80 percent share. With no competition in Europe, Sony could adjust prices by 10 percent or sell a new PS5 Pro for €799.99 (about $884).
UK pricing for the PS5 Pro is even worse. The PS5 originally launched at £449 in the UK and $499 in the US — a currency gap given the weaker value of the British pound over the past decade. After a price increase to £479 in 2022, the UK now faces £699 pricing for the PS5 Pro compared to the US’s $699 launch price. If you want to buy the PS5 Pro and the separate disc drive in the UK, it works out to a steep $1,045. In the US, it’s as little as $818 with sales tax in many states for both console and disc drive, almost a $230 difference.
Sony faces little competition in Europe and the UK from Xbox console sales, and Microsoft’s plans for an Xbox Series X redesign have been put on hold. It appears to be skipping the mid-generation spec bump in favor of an all-digital white version of the Xbox Series X and a 2TB limited-edition model. Neither of these offer the enhanced GPU that comes with the PS5 Pro, and that leaves room for Sony to set the PS5 Pro’s global pricing accordingly.
While I hope the price of the next-gen consoles won’t go anywhere near $999, I can’t help but think that a $699 price tag won’t be all that surprising by the time the next-gen comes around. hardware. Maybe we all need to work more hours to afford one. We’re heading into uncharted territory for console generations, and Sony’s PS5 Pro pricing is about to test the waters for the decisions Sony and Microsoft are making now for their next-generation hardware choices . Hold on to your disc drives and wallets, because consoles are about to get expensive.
