Surely you have a console at home, whether portable or not. But what you probably didn’t know was the price of manufacturing it and how much they ended up selling it to you.
Every brand has a marketing strategy. Some seek to sell many consoles at a low price and earn with you in the future, and others seek to get a return on the sale and that’s it.
If you are interested in knowing if the purchase was good or not, keep reading, we are going to see the most popular ones.
Here we are going to analyze what the main manufacturing costs are so that you can later deduce why the profits are higher or lower depending on the brand and model.
A console that has a screen (Nintendo Switch) is not the same as one that does not (PlayStation). This is one of the points that increases the manufacturing cost the most, especially if it is of good quality and tactile.
Another of the values that make a difference is advertising and its general marketing. On the one hand, consoles like Xbox, Playstation or any of Nintendo have a high cost at this point, since they look for the massive sale with low profit margin to then win with all the loyal customers in the long term. However, the typical Aliexpress replica with 100 games included for €30 does not have this drawback, it focuses on quick sales and without advertising at a much lower price, that is its appeal.
Other points to consider are internal updates or later releases. They require a lot of monthly spending on investment and support to be able to maintain themselves and serve their users. A computer, for example, does not have this need (except the OS).
How much does each brand earn?
We are going to briefly review the main companies and their costs/benefits.
A Playstation 4 would have a total manufacturing cost of about $381 compared to the $430 that a Play 5 would cost. So we would talk about very fair profits for the brand due to its sale price very little above these data.
The Xbox One would be around $470 while Microsoft’s latest model, the Xbox Series X, would cost almost $500. This gives us some very interesting data, since we can observe how the models of this brand have negligible or even negative benefits in the initial sale of the product.
This company is characterized by the portable console, with its star at the moment the Nintendo Switch. But how much does it cost to produce it? Well, it is estimated that it would be around $257, another outrageous counting what it costs to buy it. Its margins, like those previously analyzed, are very low.
And a PC?
Here things already change a lot as we mentioned at the beginning. A PC does not need that publicity or support that a brand like the previous ones gives us. A computer is based on pieces that can be from different companies and models that we can build to our liking and that then no longer have more profit than the sale, therefore, setting up a computer will always have a different profit margin. The sum of all the components may cost us $1,000, however, the cost of producing it individually for each piece would be much lower, which is where they make the profit.
What is more profitable to buy?
Given the above, now it is up to you what to choose. A console is always going to be a great purchase since they are practically selling them to us at cost price. On the other hand, a computer is a bad investment if we only want it exclusively to play (always talking about power and features similar to the consoles we compare it to, including keyboard, monitor, and everything you need to play that these already come with).
Definitely, major companies have very small margins due to competition and therefore our choice should be based on taste and not looking for profitability on our part.