[robertlagrant]

That's one thing. The other is price. Consoles can be sold at a loss, particularly early in their 10-year cycle, when early on the loss is high, but close to the end of the cycle the loss is minimal, and so they appear much cheaper.

[nemomarx]

Given recent price rises for console hardware I think they're struggling with that too though. The model doesn't work as well if the components get more expensive over time and not less?

[Narishma]

But PC parts are also getting more expensive, so the difference is still there.

[nemomarx]

Yeah I mean specifically the "sell at a loss, wait for costs to get lower over the generation" thing. if it's at a loss at the start of the generation and component costs only rise, it'll still sell for a loss at the end but also it'll be more expensive for customers. this puts the company in a hard position. a lot of gamers are also used to waiting until the end of the life of a console and getting games used, which might no longer be an option

[dpoloncsak]

Oh, for sure! It's not getting any better with PC part prices lately either...

I've never considered that my old 360 was probably sold at a loss, knowing I'd buy LIVE and all the games they take a cut/license fee off of, but that makes complete sense to me

[Tsiklon]

This cycle is different. Prices have increased for both Sony and Microsoft’s consoles and no higher efficiency versions have been released (ala the PS3, X360).

[robertlagrant]

True. I think there are two new issues this cycle:

1. They are testing what the market will bear. Ubisoft's silly "quadruple-A game" rhetoric and executives saying "people will have to get used to $100 games" is them testing the water. This should pull back, as most people don't want games that cost that much, unless they're really amazing. They aren't (currently). I imagine this same thinking is going on in hardware-land.

2. Current RAM/GFx card prices are driving up prices all round. It should still be true that for the same spec, console components should get cheaper over time, but I can imagine it's less of an effect at the moment with all the AI data centres hoovering up manufacturing capacity.

[CrimsonCape]

It seems like their strategy will be to just raise hardware and media prices. Just keep doing the same at a higher cost. If it's a loss leader today, it will stay a loss leader tomorrow, just at higher cost. The question is whether the customers keep showing up at the higher prices.

[robertlagrant]

Indeed. No one expects console manufacturers to take unlimited losses, but yes, the price at the end of it all is what will matter.

[galleywest200]

Sony released the PS5 Slim earlier this cycle.

[thinkingQueen]

Isn’t PS5 Pro a higher efficiency version?

[Narishma]

No, it's a more powerful version.