Yesterday’s announcement of the PS5 Pro wasn’t a surprise. What was a surprise was the price. At $699.99, it will debut as Sony’s most expensive console ever. This is reminiscent of the PS3’s controversial price; adjusted for inflation, the PS3 costs $779, the same as the PS5 Pro with the added disc drive. This is a very expensive PlayStation, and I fear it will be a test of what next-gen console pricing will be like.
For years, console gamers have been accustomed to buying hardware at prices significantly lower than what they could build themselves for PC gaming. Sure, you can find components that are comparable to a PS5 or Xbox Series X in theory, but it’s still hard to hit the prices that consoles are selling for, especially when they’re discounted during promotions. Plus, the easy plug-and-play model, simplified UI, and hassle-free warranty process are all big advantages over building or finding a great pre-built PC and dealing with Windows and driver updates. Consoles sell in the millions because they’re so much more consumer-friendly than PCs.
But it feels like the gap between consoles and PCs is becoming more and more blurred. Both Microsoft and Sony have pushed this current generation in the direction of having the type of CPU, storage, and GPU power that you get in a gaming PC. The PS5 and Xbox Series X/S don’t have underpowered laptop-like CPUs, but much more powerful gaming CPUs, which will improve the performance of your existing game library in the same way that upgrading your GPU on the PC side will. That’s why when I reviewed the Xbox Series X in 2020, I called it the next generation of PCs.
The PS5 Pro makes that trend even clearer: Sony’s selling point is that the $700 upgrade will improve frame rates while maintaining visual quality, across existing and new games. This has been a selling point for GPUs for decades, and Sony is now trying to test whether console gamers are willing to upgrade their hardware in the same way that PC gamers are willing to build an entirely new rig.
The big difference this time is that Sony wants you to pay for the upgrade, just as PC gamers have reluctantly become accustomed to soaring GPU prices in recent years. Both Sony and Microsoft typically sell their consoles at a loss initially to subsidize their hardware and broaden the market for their next-generation systems. Those initial hardware losses are usually made up through digital game revenue and in-game purchases.
The PS5 Pro will be primarily sold digitally and will ship without a disc drive. Of course, you can purchase a disc drive separately (for $79.99), but if you don’t mind, Sony will benefit from this digital sales push and the 30 percent discount you get on most purchases. Both Microsoft and Sony are pushing for discless consoles, and it seems likely that the next-gen systems won’t come with a disc drive as standard. Still, hopefully you’ll be able to purchase a disc drive separately.
It also seems likely that the next generation of consoles will be much more expensive than what we’re used to: component costs aren’t coming down, the console market isn’t growing, and Microsoft’s Xbox head Phil Spencer acknowledged earlier this year that component prices aren’t coming down fast enough, making it hard to subsidize the hardware.
Last year, a Microsoft document revealed that the company planned to subsidize the Xbox Series X and S by $1.5 billion in 2021 to hit price targets of $499 and $299, respectively. “This represents the largest hardware subsidy ever recorded in Microsoft’s gaming division’s P&L,” the document revealed. With Xbox Series S/X sales still lagging behind the PS5, it’s unlikely that Microsoft will bet on heavily subsidized Xbox hardware again for its next-gen consoles.
Sony already seems to be at a stage where it will no longer heavily subsidize its PlayStation consoles. The lack of a disc drive will lower the console cost for Sony for both the PS5 Slim and Pro models. The pricing of the PS5 Pro also seems designed to be profitable from day one, not months or years down the line. It took Sony nearly a year to stop selling the $499 PS5 at a loss, and a year after that it raised the price of the PS5 outside the US to cover inflation and component costs. In 2022, the price of the PS5 increased by 10% in Europe, 12.5% in Japan, and about 6% in the UK. Sony has raised the price of the PS5 three times in Japan since its launch in 2020.
Importantly, Sony hasn’t increased the price of the PS5 in the US, the only market where it faces competition from Xbox sales. Microsoft admitted last year that it has 80% market share in Europe, compared to 20%. With no competition in Europe, Sony could adjust the price by 10% or sell the new PS5 Pro for 799.99 euros (about $884).
The PS5 Pro’s pricing in the UK is even worse. The PS5 initially launched for £449 in the UK and $499 in the US, a currency difference due to the decline in the value of the British pound over the past decade. After increasing to £479 in 2022, the PS5 Pro now costs £699 in the UK, up from $699 in the US. If you buy a PS5 Pro and a separate disc drive in the UK, it will cost you a hefty $1,045. In the US, the same console and disc drive cost $818 including sales tax in many states, a difference of around $230.
Sony faces little competition from Xbox console sales in Europe and the UK, and has put Microsoft’s plans for a redesign of the Xbox Series X on hold, seemingly skipping the generational spec boost in favor of an all-digital white version of the Xbox Series X and a 2TB limited edition model, neither of which offer the improved GPU included in the PS5 Pro, leaving Sony with room to price the PS5 Pro accordingly around the world.
While I hope the next-gen consoles won’t be priced anywhere near $999, I can’t help but think that a $699 price tag won’t be all that surprising by the time the next-gen hardware arrives. Perhaps we’ll just have to work longer hours to afford it. We’re heading into uncharted territory for a console generation, and Sony’s pricing of the PS5 Pro will test the decisions Sony and Microsoft are currently making regarding their next-gen hardware choices. Hold on to your disc drives and wallets. Consoles are about to get expensive.
