The Playstation 5 has been released into the world and offers an unprecedented gaming experience.
Yet, people keep asking me the same question:
Why is the PS5 so expensive?
And it’s a fair question. After all disk version of the PS5 retails for $499. That’s a full $100 dollars more expensive than the PS4 was at launch.
So why is Sony charging so much more?
Well, actually, though the PS5 at first glance seems more expensive, it actually isn’t.
Let me explain…
Why is the PS5 so expensive? The PS5 actually isn’t that expensive when you take into account the following:
- Sony is making a loss on each console
- The PS5 offers more power for your money than cheaper consoles
- If you take into account inflation the PS5 isn’t that much more expensive than the PS2 and PS4 and is actually cheaper than the PS1 and PS3
- The PS5 costs far less than a comparably powered gaming PC
- The PS5 has more custom hardware
We are happy to buy other electronics, such as phones, that are 2, 3, and even 4 times expensive
Ok, now it’s time to explain each point in a little more detail. But be warned:
The figures comparing the expense of a gaming PC to PS5 are quite shocking.
You have been warned…
Sony’s making a loss on each console sold
First up, it’s generally accepted that Sony is making a financial loss on every Playstation 5 it sells.
This means that it costs Sony more than the $499 retail price to retail a PS5.
Sony’s PS5 loss has been confirmed by multiple reports with most saying just the PS5’s parts alone cost $450.
That’s before taking into account the cost of assembly, quality assurance, logistics, software dev such as tools and UI, extras such as cables and controllers, and R&D.
All these extras would easily push the PS5’s total cost north of $600.
So the fact you can buy a PS5 complete with all its next-gen technology for less than $500 is actually quite a bargain.
The PS5 offers more power per dollar than the cheaper competition.
PS5 comes packing 10 teraflops of graphics computing power.
That equals $50 per teraflop.
The Xbox Series S sports 4 teraflops of computing power. And at a retail price of $300 you are paying $75 per teraflop.
That’s $25 dollars more than the PS5. Plus your not getting PS5’s next-get Tempest sound engine, bespoke SSD, and DualSense controller.
But what about the Nintendo Switch?
Well, the Nintendo Switch is a fantastic console stuffed full of gaming greatness. Just take a look at Zelda: Breath of Wild and you’ll see what I mean. But Nintendo’s handheld console hybrid only offers 1 teraflop of computing performance in docked mode.
So you’ll be handing over $299 for a single teraflop of graphics power. OK, yes, I do know the Switch offers a huge amount more than just graphics.
But the point I’m making is this: the PS5 actually offers a lot of graphical power and features for its price.
In real terms, PS5 costs the same as previous-gen PlayStations.
When we look at the price of the PS5, we tend to compare it directly to the price we paid for consoles in the past.
For example, way back in 2001, you could buy a PS2 for only $299.
But that price doesn’t take into account inflation.
Inflation means that things in the past seem cheaper than they do now.
For example, a $299 PS2, if you bought in 2020 and accounting for inflation, would set you back a rather hefty $446.64.
With that in mind, let’s have a look at the past price of Playstations adjusted to take into account inflation. I think you may be a little surprised:
- PS4 – $444.96
- PS3 – $772.66 (Shocking really when you think about it.)
- PS2 – $446.64
- PS1 cost $507.28
So when inflation is taken into account, the PS5 is actually right in line with the cheapest PlayStations ever built: the PS2 and the PS4.
Yes, it is slightly more expensive than the PS2 and PS4. But not massively more expensive considering the massive gulf in technology. And the Digital PS5 is actually cheaper than both.
But what’s even more startling is how much cheaper the PS5 is compared to the PS3 and PS1.
Shockingly Sony’s first-ever console, the PS1, cost 7 dollars more than the standard PS5 and $107 more than the digital PS5 when adjusted for inflation.
But that’s nothing compared to the PS3. The “George Forman” would cost a wallet crushing $272 more in real-world terms than the disk-based PS5. That difference in price is extended even further to $372 when compared to the all-digital PS5.
So the PS5 really isn’t that expensive when compared to previous generations of consoles when inflation is factored into the equation.
A PS5 costs far less than a Gaming PC with comparable hardware
The PS5 offers 10 teraflops of raytraced graphics power, an 8 core 16 thread CPU, 16GB of GDDR6 memory, and a 9GBs SSD. Sony’s black and white behemoth offers a lot of power.
So I was wondering: how much would it cost to build a gaming PC with similar hardware?
Surely it wouldn’t cost too much? Boy, was I wrong!
A gaming PC containing comparable hardware to the PS5 on IBuyPower.com would cost about $2292 dollars!
That’s 4.5 times more expensive than a PS5.
This probably says more about how much of a ripoff PC gaming hardware is.
But it also highlights just how much value the PS5 has stuffed into it.
PS5 has more custom hardware compared to Xbox Series X.
A question that I’m often asked is why are the PS5 and Xbox Series X the same price when the Xbox Series X has 12 teraflops compared to the PS5’s 10.
My answer is always the same:
The PS5 has a number of custom components and accessories that easily make up the extra costs.
Here are a few of them:
PS5 RAM
The PS5 RAM is a single pool of GDDR6 Ram that operates at a speed of 448 GB/s. The Xbox Series X has two pools of GDDR 6: 10GB at 560GB/s, 6GB at 336GB/s. Microsoft chose to use some slower RAM because it’s cheaper.
Custom SSD
The Xbox Series X has a slower SSD – Xbox SSD can shift 5GB of data per second whereas the PS5 can shift 9GB of data per second.
Custom Sound Chip
The Xbox Series X has a dedicated sound chip, but the PS5 has a bespoke sound chip called the tempest engine which can produce proprietary 3d sounds.
Next Generation controller
The PS5’s DualSense controller is far more advanced than the Xbox Series X controller.
The DualSense controller enjoys advanced haptic feedback rumble and adaptive force triggers.
These technologies push the manufacturing cost of the controller up. Some of this cost is absorbed by increasing the retail price of the PS5 console.
Other electronics are far more expensive
It’s also worth keeping in mind that electronics such as Smartphones, TVs, and sound systems are far more expensive than the PS5.
Here are a few examples of excessive electronic prices:
- High-end mobile phones sell for in excess of $1000
- A Smart TV can easily cost over $1500 depending on the size of the TV
- Mid-range gaming PCs set you back $2000
- A high-end VR headset can cost $700
- Apple’s cheapest laptop, the Macbook Air, costs $1000
- An iPad pro will easily set you back $900
When you look at how much we are willing to pay for other electronics, the price attached to PS5 looks a little underpriced in comparison.
Additionally, the average console will happily sit under your TV for 6 years plus.
Compare that to smartphones. Your average Samsung 57 (or whatever number they are on) costs more than $1000. Yet, it’ll be consigned to the rubbish heap in 2 years.
So paying $500 for a console that’ll give 6 years’ worth of gaming seems like a pretty good deal to me.
Conclusion
Ok, we are at the end now. But my articles are never complete without a quick bullet point summary to cement all the ideas into your head.
The PS5 isn’t as expensive as you think because:
- Sony is making a loss on every console sold
- The PS5 is cheaper per teraflop of graphics power than cheaper consoles such as the Xbox Series S and the Nintendo Switch
- Because of inflation, the PS5 is actually priced competitively and comparably to previous generation Playstation consoles
- PS5 – $499.99 – $399.99
- PS4 – $444.96
- PS3 – $772.66 (Shocking really when you think about it.)
- PS2 – $446.64
- PS1 cost $507.28
- A comparably powered gaming PC would cost 4.5 times more than the PS5
- The PS5 has more custom hardware which pushes the cost of manufacturing up
- We pay far more money for other electronics such as mobile phones and TVs
What next?
Can I lay the PS5 on its side? I don’t like the idea of standing it up. It might fall over! Yes, you can lay the PS5 down on its side. Though, it’s not as easy to do as it probably should be. Thanks, Sony! Check out my article here for a detailed walk-through of how to lay the PS5 down on its side.
Can PS4 Players play online with PS5 players? Thankfully, yes they can. Check out my article here for a detailed explanation of how to play with your PS4/PS5 friends.