 Hey everyone Nathaniel Rovelljans from Nintendo Prime and today we're talking about PlayStation 5 because we have Some news about PlayStation 5 that it deals with the pricing of it And we're just gonna read this whole article and kind of react to it It says Sony is struggling with the PlayStation 5 price cut due to costly parts Now this comes from Bloomberg, which is a very reliable outlet, but it actually comes from a writer We're very familiar with Takahashi Machizuki who used to work at the Wall Street Journal as a Japanese correspondence Specifically with a lot of video game stuff. He did he does other things besides video game markets But he's talked a lot about Nintendo in the past and here he's talking about Sony and using his connections And it says in the by-lines that he may wait for Microsoft's Xbox Fruit to make the first pricey move It definitely sounds like they're definitely doing that We've heard rumors they're waiting for Microsoft to announce price first And that there's a new PlayStation VR headset also planned after the PlayStation 5 launch or around the time that it launches Which that's not surprising PlayStation VR is like the most popular VR headset in the world Even though it's a smaller market Sony has a big foothold in that market So it's not surprising to see them launch a new one that goes with PlayStation 5 Anyways, let's get into the article says scarce components have pushed the manufacturing costs for Sony corporations next PlayStation to around $450 per unit that is very like that's that's their cost to make and Manufacture and put together a PlayStation 5. That's a lot I mean, that's $50 more than the PlayStation 4 costs at retail a PlayStation 4 pro I should say forcing a difficult price-setting decision in its battle with Microsoft Corporation according to people with knowledge of the matter One thing to note here is that Microsoft traditionally Takes a loss when they price their their systems Sony does sometimes but not always Sony usually goes for profit. They went You know for profit with the PlayStation 3 at 599 and they did make about I don't I think it was about 20 bucks per unit on PlayStation 4's At the time so like Sony usually likes to make a profit per unit whereas Microsoft's willing to take a big loss Because they they like to make up money in the back end with Xbox live and Xbox game pass subs and all that Anyways, let's get into the rest the article The Japanese conglomerate is preparing to gradually replace the six-year PlayStation 4 console Releasing this PlayStation 5 the same holiday season its arch rival debuts the upcoming Xbox series X Sony typically finalizes a console's price in February of the release year followed by mass production in the spring with the PlayStation 5 the company is taking a wait-and-see approach said the people the people Asking that to be named because the details of private the PlayStation 4 released in 2013 in a retail price of 399 It was estimated by a ihs market to cost $381 to manufacture With the $450 unit cost and a similar gross Martin's the PlayStation 5's retail price would have to be at least $470 so they predicted projected about $19 profit. I thought it was 20 whatever somewhere in there It was profitable either way that would be a hard sell to consumers considering that that's Sony's most expensive machine Now is the 399 ps4 pro and is often discounted according the marquee capital analyst Amy and thong it would be great I mean people have wondered are we going to his next gen PlayStation 5 Xbox series X? Are we looking at 499 people have been debating are we gonna see a $500 launch system? That's still not PlayStation 3 pricing that launch, but it's still pretty high seems like 400 It seems to be the ceiling for Consoles, but I don't know. There's a lot of power in these things. So we'll see what happens Consumers will benchmark their expectations based on the PlayStation 4 pro and the ps4 song said if Sony prices above that It would likely be to balance a need to offset higher material costs against risk-to-demand Sony declined to comment the company's biggest headache is ensuring a reliable supply of DRAM and NAND flash memory Nintendo's had issues with the NAND flash specifically as well driving up costs to manufacture switches With both in high demand as smartphone makers gear up for the fifth generation devices according to people familiar with Sony's operations Samsung electronics company just announced its galaxy s20 product range, which looks really cool by the way Each variant of which will have 5g and a minimum of 12 gigabytes of RAM in the United States Video game companies often sell hardware at thin margins or even at a loss because they profit from lucrative game software Recurring online subscription services Sony's chief executive officer Kanjiro Yoshida has said the business should be judged by the number of active users Not the number of hardware units sold Some Sony game staff think it should sell the new console at a loss if necessary to match Microsoft's price Well other Sony executives refer to make money as the company did with the ps4 because it is likely that that Microsoft is going to undercharge what it costs to make the next Xbox And that potentially could put it at a cheaper price than what Sony does and that's that's the internal debate Or the eternal debate really is like should they should they you know Undercut the match because Microsoft's likely not going to make the same mistake in bundling something in and making it a hundred dollars more Microsoft's likely gonna try to behave. There's Xbox Series X and it's 399 Period and I don't know if Sony's willing to match that price point and lose $50 per unit. That's We'll see And we must keep PlayStation 5's buildable materials under our control And we need to make the correct number of units in the initial production Sony's chief financial officer Heroki to toky said in an earnings briefing earlier this month Most of the components for the console have been locked down the people said including the cooling system Which is unusually expensive at a few dollars per unit typically companies would spend less than a dollar Basically a fan and a heat sink But Sony opted to lavish more on making sure heat dissipation from the powerful chips housed inside the console isn't an issue This is actually really good news PlayStation 4's and really playstations in general There's times like a little bit of dust build up and it's like taking off like a jet engine I'm if they're using some sort of vapor chamber cooling like the Xbox one X is or like some phones aren't stuff That would be really really ideal It cuts down on noise massively and noise can't in consoles Especially is way louder than even most gaming PCs and gets kind of crazy especially with playstations So I'm glad to see that they're they're going to spend a bit more on a premium cooling Solution I hope I hope it's not just a bigger fan with a bigger heatsink because then it's going to be even louder But I'm assuming it with a few bucks in production. It's got to be probably like a vapor chamber or something like that Crazy if they were full on water cooling, but I highly doubt that because there's longevity issues with water cooling and maintenance and stuff The ongoing coronavirus outbreak has had no Impact so far on preparations for PlayStation 5 production. They said the companies at the side how many PS5 units It won't make it the first year so The big thing here is we there was a previous report that coronavirus could cause like PlayStation 4 Xbox Series X to be delayed Now what they're doing the big note about this is as the it has had no impact on preparations Doesn't say it doesn't have any impact on manufacturing Basically what they're saying here is PlayStation 5 has not gone in the mass production yet and because it's not in mass production It's hard to know what if any impact coronavirus has coronavirus just has not affected their preparation process So we'll see what happens once it goes in the mass production if any more reports come out that you know There's not as many workers at the factories or whatever is happening or supply chains for the factories are restricted You know, we don't really know what's gonna happen until it goes in the mass production separately Sony plans to release a new version of the PlayStation VR virtual reality headset Tentatively scheduled after the PlayStation 5 goes on sale. So it probably won't be there at launch probably early 2021 but that's okay I mean you give people time to be acclimated to the PlayStation 5 and then give you give them a new headset The old headset will probably be you know usable with it by the way like if you own a PlayStation VR right now You could probably use it with the PlayStation 5, but you're just gonna get a better experience if you get the new one Just you know like most things you get new tech It's usually you know better than the old tech You know, I got iPhone 11 here like it's better than the old iPhones like that's just the way it goes Sony has already canceled some previously planned features for new mirrorless camera do this year Only to the constrained at DRAM supply several people with knowledge of the matter side now This is mirrorless camera. This is because Sony also creates some really really nice cameras. I'm not using a Sony camera myself I'm using a Lumix camera, but there's a lot of Sony branded cameras out there and mirrorless is the kind of camera I'm using right now You're seeing me through a mirrorless camera and they were gonna launch a new one this year But they're holding back because they need DRAM and DRAMs just being allocated to video game systems And obviously a lot of computer parts. So a delay on their camera side so they can push their video game side basically Sony executives are voicing patients about the next console's pricing as they anticipate the transition to be a gradual one Said people familiar with his day-to-day operations many of the games launched for the PlayStation 5 will also be available To play on the predecessor machine, which is true Although Sony they come out and say there will be exclusives, but I wonder if they're timed I'm kind of curious how exclusive those games are going to be I have a feeling even a lot of Sony's internal games will still be on the PlayStation 4 for at least a year I know that was a big controversy with Microsoft because Microsoft said hey look our Exclusive games aren't really exclusive. They're also going to be like playable on Xbox one and Xbox one X For a year or two and that really put some people off But I'm gonna be honest if Sony's planning for PlayStation 5 to not be this big factor for them for a little bit I mean, that's just like last-gen or current-gen really There was a gradual transition from PlayStation 3 to PlayStation 4 same with 360 to Xbox one So I mean that I think that's pretty reasonable to expect that PlayStation 4 is still gonna matter for a couple years So revenue from software and related network services is expected to keep the business performance intact So PlayStation Network is stuff like that Microsoft and Sony are both expanding their respective online subscription services revenue from which may allow them greater flexibility in hardware pricing That's what Microsoft's banking on they already have expanded a game pass and how we've X cloud coming So Microsoft's really well-positioned and not night not need to make a profit per unit sold on their system People within the PlayStation business unit set a key factor in deciding the ultimate PlayStation 5 retail price will be where Microsoft sets its price for the next generation Xbox Series X Microsoft is widely expected to hold that information back until the E3 gaming expo Which is pretty much as late as you can hold it back for people who want to pre-order So that that'll be huge. That's gonna be huge announcement E3 They announced the pricing for Xbox one at that time too and we know Sony's not going to be there So Sony is probably gonna hold an event shortly after E3 to announce their pricing So I bet you they definitely are gonna let Microsoft go first with the pricing And you're gonna match it or try to undercut it because remember this generation what worked for them brilliantly is when they said Hey, look like we have a more powerful system and it's cheaper at launch because we're not bundling in the PlayStation camera So Microsoft's not gonna make that the camera mistake again the connect mistake, but they're They're wondering, you know, I think if Microsoft comes in at 399. There's no way in hell PlayStation 5 is going below 399 Maybe they'll match. Maybe they won't I don't know but I Have a feeling that the Xbox Series X and PlayStation 5 are gonna be the same price I bet you unless Microsoft goes crazy if Microsoft goes for the the 499 price point I could see PlayStation being like, oh, we'll go 450. We'll go 470 You know, they'll undercut but we'll see there is pressure from CFO to toky for Sony to provide more Transparency and information in the build at the PlayStation 5's release because they haven't been very transparent Which is cause some consternation internally asked about when the expert when he expects Sony to provide guidance on the game He was an outlook from new fiscal year to toky said the plan is no different from recent years So basically around the end of April the company takes on unusual analysts may look to its next investors Relation meeting to glean hints about the new console's retail price company held that meeting in late May of last year So basically right before you three so on screen right now You're seeing what's already been confirmed to be a PlayStation 5 dev kit These are really super clean renders of it The real thing isn't quite that shiny and everything but these these are renders of a PlayStation 5 dev kit This is not what the PlayStation 5 itself is gonna look like this is just what developers have on their desks or wherever They're they're developing games in their basement for first probably some indie developers or something The point is that PlayStation 5 is Going through a process right now where Sony isn't exactly sure what to do because it's really expensive It is by far the most expensive new generation system ever made And we already know that Xbox series X according to people that are actually developing games for the series X and for PlayStation 5 It's more powerful by the way than the PlayStation 5. We don't know what the margin of difference is I'm sure it's within margin of error and it's gonna be very very close because they're using the same Companies in the same parts essentially internally pretty close to the same parts But apparently the Xbox series X is going to be more powerful And if it even if they cost say 500 bucks to make an Xbox series X where they charge 399 Sony is gonna be in a really difficult place Now Sony has the brand power of course they have that the consumer trust They have the the more well-established studios and exclusives coming to their their platform and you know Microsoft's got to build up that reputation with the new Hellblade and all the studios they bought but It's gonna be interesting this next-gen battle between Microsoft and Sony is gonna be very interesting Even as Microsoft has said their competitions more Google and Amazon because they're talking about streaming services They are very much still in direct competition with Sony and PlayStation 5 And yeah, I mean Sony's gonna wait Sony's gonna play the weight game They're gonna let Microsoft announce the price of D3 and then they're gonna match it or undercut it I'm not sure which depends on what the price is And honestly, I think 399 is a sweet point if they can get it to 399 I think it's gonna be great But is Sony willing to lose, you know 50 plus dollars per unit to sell it at 399 I don't know Microsoft is definitely willing because they are way better off than Sony is overalls company And they have all that additional revenue coming in from Game Pass and Xbox Live and then xCloud eventually so I'm very curious how this is going to work out. This is a very fierce competition Nintendo's role on all of it is just let them battle it out And we're just gonna keep doing what we do because Nintendo just doesn't care So for switch purposes, I don't know how much of an impact it's even gonna have It definitely sounds like all these games gonna be backwards compatible for a while So switch to still get third-party support for a year or two But man, it's gonna be it's gonna be crazy. I'm excited I'm always excited about new technology and next-gen stuff and I just can't wait like Sony's doing weird things with the PlayStation 5 We now know what the dev kit looks like that leaked when confirmed, but then like oh they give us a logo Oh, there's a PlayStation 5 website, but there's no announcement on when they're actually gonna unveil the PlayStation 5 and Like it's kind of crazy. Sony's almost a little tepid right now. It's kind of like us waiting for Nintendo Direct So when are we gonna get Nintendo Direct? I don't know when Sony gonna unveil the PlayStation 5 I don't know This is crazy because Microsoft already went first at the game awards They shocked everyone and showed the system showed a game for the system like I think that was shocking That was last year So Here we go folks next-gen The hype is real Anyways, I am Nathan and Robert J. S. from the center five you enjoy this video You want some more PlayStation 5 news and all that be sure to like subscribe comment below get this video tons of views Because the more views these kind of non-Nintendo videos get the more coverage I'm going to be inspired to do because I am very interested in PlayStation 5 PlayStation 5 games Xbox series X Xbox series X games This stuff is very interesting to me I'm not do plan to own both systems at launch so we can have that three-way battle of switch and PlayStation Hopefully switch pro PlayStation 5 and Xbox series X. It's gonna be exciting. Thank you guys so much for tuning in and Yeah, subscribe hit that bell icon and I'll catch you in the next video