You're assuming that absolutely no one who bought a $200 PS4 would buy a $500 PS5 if the $200 option didn't exist.
Not no-one, but the nearly no-one.
A generally uninformed but cost-savvy parent whose kid told him he wanted a Playstation won't know the difference between the two and buy the cheapest one. Anecdotally, I've seen this happen quite a few times throughout the years.
But a parent who cannot afford a PS5 won't buy it. Plain and simple.
A more likely scenario would be:
- 50 million buying a $500 PS5 with each spending an average X on games/services, and 10 million buying a $200 PS4 with each spending Y on games/services.
- 55 million buying a $500 PS5 with each spending an average X on games/services.
If those were the numbers we're talking about, you'd be right. But I don't think it's anything like that. If it worked that way in business, there wouldn't be cheap entry-level platforms and the more expensive options would always be pushed. There are consumers who's spending power will never reach the high-end costs, so you either ignore them or give them a lesser experience at a lower price. If you don't offer a lower, cheaper experience, someone else will, which is why everyone in CE except some exclusive high-end brands produces a range of products.
With the PS1, Sony started with a business model that had a larger proportion of revenue coming from console sales. That has changed.
To one that is far, far more profitable based on number of network users. One network user will generate more profits than ten consoles sold at a small margin.
This couldn't be further from the truth.
February 2013, year the PS4 launched:
Sony: PS3 still has a long life.
In response to an investor question. It wasn't a PR announcement. Has anyone asked Sony what will happen to PS4? If not, don't expect them to talk about their cost-cutting plans. That's not a conversation that interests them.
There's no statement this year that is even remotely similar. We have Sony officials stating they want devs to start with a clean sheet for the PS5. We have them saying the learning curve for making PS5 games is smaller than ever, especially for those coming from the PS4. We have Sony pretty much saying they want PS4 developers to transition to the PS5 as soon as possible by decreasing the "time to triangle" and maintaining important key architectural points (x86 + AMD GPGPU + unified memory architecture)...
Yes. That's all to give PS5 a great start. That doesn't stop PS4 going anywhere. Even if no more new games are made for it, there's a library of thousands of titles for late owners to enjoy.
Sony wants every customer whose PS4 dies or malfunctions in late 2020 forward, to buy a PS5 and not another PS4.
And they want everyone who wants a console and can't afford a PS5 to buy an PS4 instead of an Xbox, no?
There's no better way to get more people to adopt the PS5 than to make the PS5 the only PlayStation in the shelves.
Indeed. But, again, for those who cannot afford a PS5, you either let MS win them over or provide a PS4.
It's clearly not, though.
It totally is. Times one million!