Topline: The much-anticipated PlayStation 5 will cost $450 for Sony to make, according to a new report from Bloomberg, which means the price tag could hit $500, about a 67% jump from the original price of a PlayStation back in 1995.
- The 1995 PlayStation 1 price tag, adjusted for inflation, would be about $503.48 in US dollars today, meaning the PS5 may be priced in keeping with its predecessors after all; console prices have climbed as the complexity of systems have evolved—newer consoles have more in common with PCs than older game systems.
- Sony has always played a pricing game against its toughest competitors in the console space: when the company debuted the first-ever PlayStation, priced at $299, it did so at the E3 video game convention on the heels of an announcement from Sega that its Saturn console would cost $399.
- For the PlayStation 2, Sony leveraged its leading market share against Nintendo, Sega and new-blood Microsoft by hyping up its backwards compatibility with PlayStation 1 games and controllers, ultimately pricing the console at $299 in 2000 ($443.29 in today’s dollars) a year after Sega launched its flailing Sega Dreamcast at $199 ($305.75 in today’s dollars).
- In 2001, Nintendo released the GameCube for a competitive $199 ($289.38) versus Microsoft’s hulking first Xbox at $399 ($577.29), and Sony shrewdly reacted by discounting the one-year-old PS2 by a third in 2002, setting it on its way to becoming the best-selling console of all time with over 150 million units sold.
- The subsequent PlayStation 3 was more expensive due to its future-thinking Blu-ray drive—costing up to $599 ($766.87)—and launched later than Microsoft’s Xbox 360, causing slow sales out the gate, though both systems were decisively beaten by the oddball Nintendo Wii for $249 ($318.78) in 2006.
- The story of the current console cycle may perhaps be Sony’s competitive PlayStation 4 pricing of $399 in 2013 ($441.63) against the $499 ($552.32) for the Xbox One, but Microsoft didn’t help itself with a number of PR gaffes and poor decisions in the lead up to launch, including packaging its failed motion-tracking Kinect device with the console and causing the heftier price tag.
- With the Xbox One, Microsoft also tried to kill off the used games market by initially requiring players to register disc-based games to their online accounts, something that Sony trolled Microsoft over during its meat-and-potatoes E3 presentation that year.
Big Number: 106 million. That’s how many PlayStation 4s Sony has managed to sell this generation, making it the second-best-selling console of all time behind the PlayStation 2.
Key Background: In this game of chicken between Sony and Microsoft, it’s important to consider each company’s strategy going into the next console cycle. Sony will likely follow the PlayStation 4’s path to victory: focus on first-party hits like Naughty Dog’s Uncharted 4 and Insomniac Games’ Spider-Man. Microsoft, though, has been focused on cloud streaming, its Netflix-like Game Pass and making its games accessible to even people that don’t buy an Xbox, content on getting consumers into its ecosystem. After all, the $1.4 trillion company has been selling its premium Xbox One X at a loss since release. Xbox chief Phil Spencer even made the bold statement recently that its competition is companies in the cloud business like Amazon and Google, not console-makers like Nintendo and Sony.