eli5 why are consoles so cheap when PCs also do the same thing but for 3x the price?

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eli5 why are consoles so cheap when PCs also do the same thing but for 3x the price?

In: Technology

Consoles are often “loss-leaders” – products that are sold at a loss in order to cement existing or gain additional market share and/or to sell other, more profitable products (digital subscription services and console games in this case).

Quite often the manufacturers of the consoles don’t earn much money on selling their consoles. More often it is the other way around, they lose money. But so they sell much more of the consoles. And with that, they also sell more games and accessories like controllers and so on. With that additional stuff, they earn the money and compensate for the losses by selling the consoles cheap.

They don’t actually make a profit selling consoles, they make a profit on linencing fees for games sold for those consoles, they just want to get out as many consoles as possible in order to sell many games and get more profit that way

PC . Do you mean gaming pc ?. If not , a standard PC is much cheaper than a console.

If you are talking about a gaming PC, yes it is . And PCs do more things than just gaming.

Including accounting , graphic design, programming , and much more.

I use my pc for gaming and Android app development.

Can you do that in your PS4

Besides the whole sell at a loss thing, there’s a lot of benefit to be had designing a piece of hardware to mesh perfectly with a custom OS. On top of that you get to have game designers design their games directly for your OS and hardware. The games also run better on less power because the developers are motivated to create efficient software. As we saw with cyberpunk and a few other less known games, if your game doesn’t run well you don’t have the excuse of “your pc just isn’t good enough to run our game”.

Economy of scale for one. The more of the same item you make the cheaper it becomes to produce in the long run. Consoles also have fewer and cheaper components.

A PC with equivalent specs (GPU, CPU, RAM, …) to a console costs about the same price as the console.

The console is basically a way to get you to buy games/movies/media/subscriptions/etc. I believe Sony and Microsoft lose money on console sales (or break even).

Similar to how a water delivery service works. The base of the water cooler is cheap or free because the money is made on weekly deliveries of the 5 gallon water jugs.

The market knows PC players will no matter go out to the extreme to make sure their gaming rig is top notch. Scalpers will always buy PC products until they’re sold out and this works for them.