PS5 Digital Edition will cost just 50 euros less than the regular version

The Digital Edition of the PlayStation 5 will cost $449, fifty less than the regular version. Here's why

It might be the cheapest next gen console on the market, but it won't be much cheaper than its standard version. We're talking about the PlayStation 5 Digital Edition and the estimates on its price made by Richard Leadbetter, an important signature of Digital Foundry.

According to Leadbetter, in fact, the digital-only version of PS5 will cost at best 50 dollars (and therefore, probably, even 50 euros) less than the regular PS5. The Digital Foundry analyst's estimate, then, is a price of $499 for the PlayStation 5 and $449 for the PlayStation 5 Digital Edition. The $50/euro reduction would, according to Leadbetter, result in a loss for Sony, but that loss would be largely recovered by the sale of digital titles on which the giant has higher margins than those it gets from video games distributed on Blu-ray. It is clear that these are estimates and speculations, since Sony at the moment has simply announced the two versions of its 2020 console, but has not yet made any official price.

PS5 Digital Edition: why it costs less

The answer to this question might seem trivial, but it is not at all. If the PlayStation 5 Digital Edition will cost less than the regular one, it's not just because it won't have the Blu-ray player: the cost of that component, in fact, is less than the $50 that the digital-only PS5 should cost less. If the final prices will be those hypothesized by Leadbetter, then, part of the reduction in the price of the console will be borne by Sony that, in practice, will subsidize from its own pocket the spread of this version at the expense of the other. When, at the time of the PS3, Sony already did something like this, the result was catastrophic: a net loss of 3.3 billion dollars.

PS5 Digital Edition: why it could be a bargain for Sony

Leadbetter's hypothesis, however, is that the increased revenues from sales of digital titles will be able to offset the losses resulting from the $50 "discount". If the video game is not sold on Blu-ray disc, in fact, the entire price is split between only two parties: Sony, which takes 30% royalties, and the developer, which takes the remaining 70%. If the video game is sold on a physical support, instead, it is necessary to subtract the costs of production, distribution and the revenue due to the physical or online store that sells it.

According to Leadbetter's estimates, a digital game makes on average 8 dollars more to Sony than one on a disc. Doing a quick calculation, assuming that without a Blu-ray player, production costs drop about $20, Sony needs to recoup $30 to break even. Starting with the fourth digital title sold, then, the maneuver works.