Sony plans fewer PS5 discounts as high memory prices wipe out console profits

Buyers anticipating discounts following the latest PS5 price increase may be in for disappointment. Sony’s new filing with the U.S Securities and Exchange Commission discusses its response to the memory shortage. Struggling to maintain profits, the company suggests that selling fewer consoles could limit the damage.

A warning for deal hunters

In the filing, the manufacturer outlines its strategy for marketing the gaming systems going forward:

In hardware, although Sony expects to be affected by the impact of increased prices and supply shortages of memory semiconductors, it plans to manage the impact on profitability by flexibly adjusting plans for, among other things, unit sales and promotions.

Gamers may have already seen signs of this shift with the recent PlayStation Days of Play. While games and accessories benefited from deals, sales on PS5 consoles were absent. It now appears more likely that the component shortage influenced what the event promoted.

Inflated storage and memory costs have also posed challenges for Microsoft and Nintendo. The AI-driven crisis has made the necessary SSDs/flash storage and DRAM significantly less affordable. With tariffs as another factor, buyers have lamented the Xbox Series X|S, Switch 2, and PS5 price increases.

How much is Sony losing on console sales?

Sony’s profit margins in the current generation aren’t public. The situation may not be as dire as Microsoft’s, where it’s rumored to be losing $100-$200 per unit. Still, companies are more willing to take losses when a console launches than later in its lifecycle.

Instead of relying on PS5 discounts to attract new shoppers, Sony hopes to capitalize on its existing install base. The document explains that it will be “seeking higher revenue and profits from PlayStation Plus (“PS Plus”), maximizing average revenue per user on the PlayStation Store, expanding sales of first-party game software.”

The November 19th GTA 6 release date may boost console sales. However, if manufacturers cut back on production, it raises the possibility of low stock levels. Microsoft reportedly is already struggling to assemble enough systems to meet demand. Black Friday sales could also be particularly lucrative, but it’s questionable whether Sony will offer any hardware deals.