The new console of Sony, PS5 Digital Edition, costs $100 less than the standard PlayStation 5 model, which, according to Michael Pachter, will result in a financial loss. The analyst also does not believe that customers will be interested in the digital edition in the long term.
Sony is launching two consoles in November that are very similar. The PS5 Digital Edition is almost identical to the standard model. The only thing missing is the disk drive. In return, customers will save $100 on purchase. According to the analyst Michael Pachter, this calculation will not work out for Sony.
“I think Sony really blew it with that, because as far as we can tell, the cost of making a PlayStation 5 is $450, so they are breaking even on the $500 version, but losing $40 or so on the digital version,” says Pachter in an interview with GamingBolt.
“A disc drive isn’t worth that much. So they’re losing $40, but they gain $6 more per digital game than they would gain otherwise. So you would have to buy a lot of games to cover up the loss, and I just think it’s unlikely many will buy that many games,” he further commented.
While it is unclear how Sony earns $6 more per game, the owners of the PS5 Digital Edition would have to buy an average of between six and seven games to bring the console into the profit zone. This does not take into account the fact that production costs are usually falling continuously.
Pachter went on to stress that most consumers will end up using the standard PS5 model, which will mean that Sony will likely manufacture and sell fewer digital consoles.
“I actually don’t think many consumers will want to save the money, I think most would rather have the disc drive on hand so they have the option to take their game to their friend’s house or trade it in or whatever,” Pachter says. “So I think they blew it with the Digital Edition, but it’s hard to tell early numbers, because it’s all sold out anyway, and we don’t know how many of each they made. But I think over the long run, they’ll sell and make fewer digital editions.”
The PS5 will appear in two editions on November 12 in the USA and Australia, while on November 19, 2020, it will available worldwide. The standard model costs $499. The digital edition costs $399.