PlayStation 5’s Balancing Act

The next-generation consoles are right around the corner, and anticipation is through the roof. Fans and journalists alike scurry through any hint of news about the upcoming consoles. However, recent reports suggest Sony could be in a predicament ahead of its PlayStation 5 release.

Memory Shortage

One of the key features Sony promised for its upcoming PlayStation 5 is its ultra-fast SSD. Games will load faster, creating a far more immersive gaming experience. However, reports surfaced that PlayStation 5’s bill of materials is amounting to $450. This figure doesn’t include assembly, shipping, and retail mark-up costs. Some of the high costs are due to shortages in NAND and DRAM memory.

Only three companies in the world produce the majority of the world’s NAND and DRAM supply. The lack of availability of NAND and DRAM memory is due to smartphone manufacturers hogging up both components. Companies such as Apple and Samsung have already reserved vast quantities of memory needed to produce their smartphones.

PlayStation 5 Backward Compatibility and Cooling

Reports are also suggesting that Sony is spending more on a sophisticated cooling system. This is indeed a welcome expenditure, as the PS4 was notoriously loud when stressed. The new cooling system is estimated to cost a few dollars per unit. Typically, companies pay up to a dollar per unit for cooling systems in their products. This goes to show that Sony intends to have a beefier cooling system in the PlayStation 5.

Sony needs a better cooling solution because of backward compatibility. Unlike Microsoft’s emulation method, Sony designed its backward compatibility around hardware. Leaked AMD drivers suggest PS5’s APU clocks in around 9.2 teraflops. The APU is comprised of 36 compute units (CU). In order to achieve 9.2 teraflops, each CU has to be overclocked, which needs proper cooling.

The company is relying on a similar CU count to unlock different performance profiles modes needed to play current generation games.  In other words, PlayStation 5’s hardware must allow PS4 games to be physically playable and is based on PS4 architecture. This, in turn, will rely on overclocking to boost performance, which needs better and more expensive cooling.

Balancing Price and Features

This leaves Sony in a bit of a predicament. On one hand, SIE CEO, Jim Ryan, said he wants a quick transition from PS4 to PS5. In order to achieve this, a lowered price and backward compatibility are a must. Not only is Microsoft also offering this feature, but gamers expect their games library to transfer over.  On the other hand, the costs of key components and Sony’s backward compatibility system are keeping PS5’s bill of materials high.

If the next Xbox is priced higher than $500, this will create some flexible pricing options for Sony. Yet, the company still hasn’t decided whether to sell the PlayStation 5 at a loss or not. This practice is common in the console industry. Companies often offset initial losses from licensing and sales from software and accessories. However, Sony said they will take a wait-and-see approach to determine PS5’s price.

Surprisingly, the Bloomberg article didn’t mention whether Microsoft was in the same situation or not. What is certain is that both companies are being tight-lipped about their upcoming consoles. Nonetheless, Sony CFO HirokoTotoki said that more information could be revealed in April.