PS4 Hardware Costs Have Been Reduced; Price-Cut Coming Soon?
The PlayStation 4 has been one of Sony's most successful and cost-efficient ventures in a long time. The console managed to get a massive boost off the starting line thanks to some amazing marketing momentum heaped on them by a lot of bad decisions made by former Microsoft executive Don Mattrick and the rest of the team that helped develop the original Xbox One policies. The success of the PS4 isn't just attributed to slick counter-marketing by Sony or more powerful hardware, a lot of it is also due to how efficient the design was on the manufacturing front.
Videogamer picked up an interesting tidbit from Sony's recent first quarter earnings report, where the company made some interesting notes, especially regarding the fact that they are actually posting profits again.
The earnings report stated that...
"Sales are expected to be higher than the May forecast primarily due to the strong performance of the PS4," ... "Operating income is expected to be higher than the May forecast primarily due to PS4 hardware cost reductions."
This is very interesting given that one would not have expected that Sony would have been reducing the cost of the hardware so soon. In fact, the system only just launched back in November of 2013 and it's already getting a manufacturing cost reduction.
Back when it landed on the production queue it was stripped apart and tallied up by IHS iSuppli who put the PS4 at $381 to make.
While a lot of people may consider the PS4 a mid-tier PC, I still have to admit that being able to produce such a sleek machine for only $381 is mighty impressive. It is true that finding a PC build that can perform on par or better than the PS4 at the price is an extremely difficult task without making some heavy concessions here or there.
What's more is that Sony is now stating that they have reduced that cost to something even lower, paving way for a little wiggle room for a price-cut, maybe?
Right now, the PS4 is selling exceptionally well and Sony has shifted 3.4 million PlayStation home consoles in the past quarter, including PS2, PS3 and PS4 units, the majority of which are PS4 units no doubt. This definitely dwarfs Microsoft's 1.1 million units that they shipped of the Xbox 360 and Xbox One in the last quarter.
The thing is, Sony doesn't need to cut the price of the PS4 because they're already moving massive units and they still have hype and marketing momentum on their side. For how long? No one really knows. However, they're already selling at $399 and undercutting the standard edition of the Xbox One by $100, while offering the same price as the Kinect-less Xbox One.
Depending on how much they've reduced the cost of manufacturing depends on how much they could afford to lower the price of the PS4, assuming it's something they want to pursue. But I'm going to assume that they'll likely save the price-cut for when either Microsoft or Nintendo attempt to greatly undercut the PS4's market performance (which could happen if Nintendo drops the price of the Wii U while offering a Super Smash Bros. bundle). This fall season is definitely shaping up to be an exciting time.
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