If the PlayStation 5 and Xbox Series X live up to the hype, $500 is a steal

Rumors that the PlayStation 5 is costing Sony $450 to manufacture have the Internet in a furor, but is a $500 or $600 console so outrageous in 2020?

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Sony caused quite a stir this week, as reports emerged (originating with Bloomberg Tech) about the cost of the PlayStation 5. Not the price consumers will pay, but the price Sony is paying, which is reportedly $450 per machine. Consoles are typically loss leaders—meaning the manufacturers take a hit on hardware and make it up by taking a 30 percent cut of software sales—but even so, it’s hard to imagine the PlayStation 5 coming in at less than $500. Hell, it’s hard to imagine it costing less than $600.

People (meaning the collective internet) are upset. There’s traditionally a “ceiling” on console prices. $300 is ideal. $400 gets people grumbling. $500, and your rival gets to drop the mic at E3 by undercutting you. $600, and—well, people are still bringing up the PlayStation 3’s price tag over a decade later.

And yet the new machines, from what we’ve heard, are incredibly powerful. Is $500 really so unexpected? Or unfair? I don’t think so.

Look at Mr. Moneybags over here

We try to stay away from factoring price into reviews for good reason: Money means different things to different people. When I bought my first console, I was 14 and spent $300 on the original Xbox. The console plus a copy of Halo cost me all the money I’d made refereeing hockey that summer. Literally all of it. And when I built my first PC at 22 I did it for $1,100. It was a lot of money for a decidedly mid-tier machine. I’d just graduated from college and made, on average, around $1,000 a month. That PC build emptied out my savings.

Nowadays, my desktop is worth significantly more. I’ve upgraded it a few times this console generation, and each time spent more than $500 to do so. PC gaming is expensive, and prohibitively so for some people.

Point being, $500 doesn’t seem too bad when your primary gaming machine is built around a $1,200 graphics card like the Nvidia GeForce RTX 2080 Ti. But—and it’s a huge but—there are plenty of people for which $500 for video games is an enormous expense. I get that, and I want to acknowledge that up front because it’s a sensitive topic.

Again, this is why we try not to factor money into review scores unless a product is way out of line with its peers.

Now, all that being said: I’m amazed Sony can do what it claims it’s doing with the PlayStation 5 for only $450. Seriously, amazed.

We don’t know much about the PlayStation 5 and know even less about the Xbox Series X. We do know both are built around ultra-fast SSDs that (at least to hear Sony tell it) outpace anything PCs have access to at the moment. And we know the custom AMD chips inside both support ray-tracing, which if we’re conservative about our GPU equivalent we could probably peg to a GeForce RTX 2060. Maybe an RTX 2060 Super, but let’s give ourselves plenty of leeway.

So then, let’s do the math. SSDs have come down considerably in the past few years, but if you want a 1TB m.2 drive you’re still looking at about $100 to $150. And an RTX 2060? $300 or more. (It’s the same number if we instead peg it to a Radeon RX 5700, just to be clear.)

We’ve bought two components, a graphics card and some storage, and we’ve already hit Sony’s $450 figure. No CPU, no motherboard, no case, no fans, no RAM, and no optical drive since we don’t need it on PC. The consoles will doubtless include one though, and probably a pricey 4K Blu-Ray drive at that.

Obviously we’re working with retail figures. Console manufacturers benefit from OEM pricing, from economies of scale, and such. But still, the fact the PlayStation 5 can do everything it’s claiming to do for $450? Incredible to me.

And lest you think I’m biased, I said much the same when Microsoft released the Xbox One X at $500. The Xbox One X matched the power of a GTX 970 or 1060, and did so for substantially cheaper circa 2017. As I wrote at the time:

“We’ve put together a few PC builds comparable to the Xbox One X, and the cheapest (sans-optical drive because Steam exists) is around $640. That’ll get you basic 4K, 30 frames-per-second gaming. Adding a 4K Blu-Ray drive tacks at least another $100 on the price, and your options are very limited.”

Given the hardware inside, these new consoles are (at least with our current spec estimates) a bargain.

Bigger sure, but better?

Assuming you agree with my math, the next argument is “Okay, but should these consoles be as powerful as a GeForce RTX 2060?” This line of conversation is more nuanced. If you’re feeling burned by the idea of a $500 or $600 console and you’re satisfied with your current setup, it’s easy to wonder why we need to upgrade.

And honestly, I’m torn. Personally I think the industry’s squandered most of the gains in power this past decade. Our games look better, but are they any more fun to play? Four years after its release, I still maintain that Rainbow Six Siege is the only real “next-gen” shooter this generation. Maybe PlayerUnknown’s Battlegrounds qualifies as well. They’re the only games that did something with the power of the Xbox One and PlayStation 4 that amounted to more than “The same game, but prettier.”

Okay, maybe not the only games. That’s slightly hyperbolic.The point stands, though. Do we need a PlayStation 5 and Xbox Series X if we’re just going to play better-looking versions of PlayStation 4 and Xbox One games? Especially—knowing as we do now—that the rigors of such exhaustive art pipelines are a huge burden on developers both individually and as a whole, causing them to take fewer (and larger) risks and driving up the costs of production exponentially?

That said, we’re clearly hitting a ceiling with the current consoles. The past year has been particularly rife with games that run great on PC, decent on the Xbox One X and PlayStation 4 Pro, and terribly on the 2013 console models.

These were never meant to be seven-year consoles. I mean, they were—but not really. The baseline Xbox One and PlayStation 4 were underpowered even by 2013 standards, with the GPU equivalent of an AMD Radeon 7780 or GTX 650 Ti and an AMD CPU based on Jaguar cores considered weak since day one. A mid-tier PC was more capable than those machines on launch day, and the situation’s only gotten worse over time.

If Microsoft and Sony are going to make new consoles, better to make them competitive (but pricey) now and have a longer tail. Breaking with the $400 tradition will lead to Internet outrage, and to people putting off upgrading for two, three, or even four years. But Microsoft at least has committed to no Xbox Series X exclusives for the first few years, and I expect many third-party developers will follow suit. That at least gives the price time to come down before people “need” to upgrade.

And building more expensive up front means that when prices do drop and the holdouts do finally upgrade, they’re upgrading to machines that are still viable. This generation’s been rough for people who bought the original Xbox One and PlayStation 4. The mid-generation hardware upgrades aren’t essential per se, but they’ve skewed the playing field in such a way that the baseline models feel substantially compromised. 

Ideally early adopters don’t feel quite as burned by the Xbox Series X and PlayStation 5.

Bottom line

Xbox Series X Microsoft

The Xbox Series X

Of course, there are a lot of assumptions here because we don’t really know much yet. Maybe this is the last seven-year hardware refresh, and from here we see more constant upgrades a la phones and PCs. Microsoft hinted at such with the Xbox Series X name—and also hinted that a $500 (or more) console might be the high-end option, with a low-power and low-cost variant available for those who still want a $300 console on launch day. An Xbox Series...S or whatever. It’s possible!

And hey, what about cloud gaming? Maybe in five or ten years streaming—probably not Stadia, but perhaps GeForce Now or Microsoft's Project xCloud—is a viable and cheap alternative for those who don’t need top-tier hardware.

There are a lot of unknowns.

Right here and right now though, $450 for the PlayStation 5 doesn’t seem so bad—at least to me. Is it pricey? Sure, in a vacuum. I think we all have second thoughts sometimes about how much we spend on gaming. I know I do. It’s an expensive hobby, even under the best circumstances. Amortize the cost of the PlayStation 5 out across seven years though? Assuming the hardware’s powerful enough to keep up, that still seems like a damn good deal. My desktop PC certainly won’t last that long. Hell, I’ll be lucky if I get through next year without spending $500 on a new CPU, motherboard, and an m.2 drive of my own.

What can I say? I like my games to look good—even if it’s just Kentucky Route Zero.

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