It’s been suspected that both Sony and Microsoft have sold their consoles at a loss for multiple generations, with the profits made from the enormous 30 percent cut they take of all game sales, and of course through subscriptions. In 2021, during the Epic v Apple trial, Microsoft confirmed it had never made a penny from console sales, and in 2022, we learned the company was losing $200 per Xbox. And this is before the current memory and storage cost crisis that’s seen all consoles become dramatically more expensive. During recent shareholder questions about the pricing strategy around the PlayStation 6 (via VGC), Sony said, “As a principle, we do not intend to sell hardware at significant losses.”
Rumors have swirled for a while that the PS6 could see a 2027 release, making it seven years on from the PS5’s launch, following the pattern that’s been established since the PS3. (Prior to that, the generations lasted six years.) However, given the current cost of CPUs, GPUs, and RAM, which is expected to become far worse next year, there’s concern it could force console prices into new territories that would cut off a vast number of customers. So what would Sony do in such circumstances? The question asked during a Q&A, translated by Sony, wanted to know about the “next generation platform,” whether it was “reasonable to assume that your pricing will continue to prioritize profitability of the hardware, as it does today?”
Sony’s answer began with some unhelpful waffle about “hardware as the base for providing the game experience” as if there was another means, and then confusingly brought up the PS Portal, but finally got to the question. “As for pricing,” the company says, “it is not realistic for us to absorb all the component cost increases, and we have already implemented some price increases outside of Japan.”
Not insignificant
That “some” is a pretty big oof given just how colossal those increases have been. Sony continues, “At present, however, sales are proceeding as planned, and we do not believe this has led to a decline in customer demand.” This is a slightly odd claim, given indications that the PS5 just had its worst May in 26 years. “As a principle,” the reply goes on, “we do not intend to sell hardware at significant losses.”
The keyword here is clearly “significant,” suggesting that there’s still no expectation for the PS6, whenever it might appear, to be a profit-making piece of kit. Not least given how hard it’s going to be to build anything contemporary in this AI-ruined climate for under $1,000. That’d already be an astonishing ask for a console, given the PS5 launched at half that in 2020, so tacking on a big return is even more unrealistic.
These are truly unprecedented times, where chip and RAM makers are operating like a cartel, with the vast majority of tech being scooped up by the impossibly indebted AI companies chasing one another in a death race of mutual destruction. Even a company the size of Sony cannot sensibly operate within this lunacy, and given the still strong sales of the PS5 (albeit having taken a big dip), and the breathtaking graphics it’s still capable of generating, it would seem crazy to me to try to launch a PS6 into the middle of it all. Surely waiting until 2028 is the only sensible option?