The corporation let investors in on their “strategic price point” for the popular gaming console in a recent quarterly report.
Sony’s PlayStation 5 console has been one of the most in-demand gaming consoles in history ever since it hit the shelves in North America back in November of last year. Since then, the Tokyo-based multinational conglomerate has shipped over 4.5 million consoles, reportedly at a loss for the company. In a quarterly report published today (February 6), the company revealed to investors that despite their knowledge of the unprecedented demand for their latest gaming console and their ability to set its price point fairly high, they instead opted to sell the consoles at a loss.
The “strategic price point” of the PS5 was intended to sabotage the Xbox console releasing around the same time. The gamble paid off for the company, and Sony was able to make up for the loss with gaming sales and other entertainment revenue, with the gaming division alone experiencing a 50% increase in income compared with the same time last year. The company anticipated making up for the loss on gaming sales with other streams of income, and they flaunted a record $10 billion profit for the company in the same report.
Bloomberg magazine previously noted that Sony was struggling to produce the console at the set price due to the expensive parts for the device, but the company has since left those days behind them. As mentioned prior, they’ve shipped over 4 million consoles since its launch last fall, with the consoles selling out faster than they could be manufactured.
“Everything is sold. Absolutely everything is sold,” Sony CEO Jim Ryan said in an interview. “I’ve spent much of the last year trying to be sure that we can generate enough demand for the product. And now in terms of my executive bandwidth, I’m spending a lot more time on trying to increase supply to meet that demand.”