As the PlayStation 5 is announced to enter the second half of its life cycle, Sony claims that it finds doing massive price cuts with the console “very difficult”.
During the investor call, Sony Interactive Entertainment boss Hiroki Totoki cites the difficulty in “shrinking” the PS5’s die size as a reason why the company is greatly challenged by the idea of reducing its manufacturing costs versus the PS4.
Originally, the PS5 had a die size of 308 mm², which contains 10,600 million transistors. In 2022, later improvements to the console reduced this size to 260 mm², which is the same size used with the PS5 Slim.
While it is not an option to further shrink this size to lessen the console’s manufacturing cost and thereby lower its price for consumers, Sony’s only option is to cut the price through its other components. However, at a time when the cost of hardware is rising, the only viable choice is a cheaper storage media.
During a financial call, Totoki admits that Sony does not rely on the notion of a price cut with the PS5. That is, to ensure the profitability of the business while setting their attention to user engagement and unit sales. “We need to strike a nice balance between all of those components,” he said.
The company exec also highlighted the “critical” importance of user engagement, highlighting that key monthly active users (MAU) metrics are central to it.
You can view the full speech transcript here.
