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Gaming Kaiju Industry Analysis - September 9, 2025
Sony is releasing a new PlayStation 5 Digital Edition (Chassis E, CFI-2116) in Europe starting September 13, 2025, with reduced storage capacity from 1TB back to 825GB – while maintaining the same €499 price point. This represents the first time in PlayStation history that a console revision has provided less functionality than its predecessor at the same price.
The storage reduction affects only the Digital Edition. The standard PS5 with disc drive retains its 1TB SSD Sony’s rationale: avoiding a third price increase by implementing what economists call “shrinkflation” – reducing product value while maintaining price.
The Price Spiral Context
This decision emerges from Sony’s ongoing pricing struggles throughout 2025:
Sony implemented these increases citing Trump administration tariffs and “challenging economic environment” Videogames ChronicleTweakTown. The company raised US prices by $50 in August 2025, following similar increases across Europe, Australia, and New Zealand.
The storage downgrade exposes several uncomfortable truths about current console economics:
Manufacturing Cost Pressures: Sony is reportedly struggling with rising production costs and wants to avoid further price increases that could damage market competitiveness.
Value Proposition Collapse: 825GB provides approximately 667GB usable storage – insufficient for modern game installations that frequently exceed 100GB per title.
Consumer Bait-and-Switch: Customers purchasing what appears to be the current PS5 Digital model will receive objectively less value than previous buyers at identical pricing.
This regression reflects the gaming industry’s broader retreat from consumer-friendly practices:
Technical Analysis
The storage reduction seems economically questionable. NAND flash memory costs have decreased significantly, making the 175GB reduction unlikely to generate substantial savings. Industry observers question whether cutting 175GB actually provides meaningful cost reductions.
This suggests the move might be more about market segmentation – creating artificial differentiation between digital and standard editions to justify the standard model’s higher price point.
Consumer Impact:
For European gamers, this creates immediate concerns:
This marks unprecedented territory in the console gaming industry. Previous PlayStation revisions consistently improved upon their predecessors through better cooling, power efficiency, or additional features. The PS5 Chassis E represents the first deliberate reduction in functionality in PlayStation history.
The decision places Sony in an awkward competitive position. Microsoft’s Xbox Series S costs €299 and has been available below €250, while the 1TB Series X costs €349 – significantly undercutting Sony’s €499 reduced-storage offering New PS5 Slim could offer less storage for the same price.
Bottom Line
Sony’s storage downgrade reveals a company prioritizing short-term cost management over long-term consumer trust. Rather than innovating their way out of manufacturing cost pressures, Sony chose to reduce product value while maintaining premium pricing.
This regression breaks decades of console industry tradition where hardware revisions have traditionally provided enhanced value. European consumers are essentially subsidizing Sony’s inability to manage production costs effectively.
The move suggests Sony believes its brand strength allows it to reduce value without losing customers—a dangerous assumption that could accelerate the industry shift toward PC gaming and alternative platforms.
