Current rumors have pointed to rising expectations within the video games trade that Sony (NYSE: NYSE:) may roll out a PS5 Professional, an upgraded PS5 mannequin. In a Friday be aware, Citi analysts mentioned what a PS5 Professional launch may probably imply for Sony’s monetary efficiency.

“Though we imagine the agency makes common design modifications with a purpose to scale back prices, we’ve made no particular assumptions a couple of PS5 Professional launch,” analysts stated.

“If a PS5 Professional have been to be launched, we predict it may enhance margins and increase earnings to some extent, though it could rely on the Price of Items Bought (CoGS) construction,” they added.

Based on Citi, a number of elements assist the potential launch of a PS5 Professional.

First, the timing of a possible PS5 Professional launch seems favorable, notably when contemplating the challenges confronted by the PS5’s preliminary rollout, similar to COVID-19 disruptions and chip shortages. These elements have delayed the PS5’s market uptake by one to 2 years in comparison with its predecessor, the PS4.

Releasing a Professional mannequin now, 5 years after the unique PS5 launch, aligns with a pure product cycle, particularly since Sony launched the PS4 Professional three years after the PS4.

Furthermore, Sony’s determination to take part within the Tokyo Recreation Present in 2024, after a five-year absence, suggests the corporate could be planning a major announcement. Additionally, the introduction of rival consoles may push Sony to counter with an upgraded PS5 mannequin.

Citi analysts imagine The PS5 Professional may additionally tackle profitability issues, as each the unique PS5 and its Slim variant have much less favorable CoGS buildings in comparison with earlier PlayStation generations.

Due to this fact, the Japanese tech big “could determine it’s value launching a high-priced Professional mannequin to enhance the console’s margins, even when it means sacrificing gross sales quantity,” analysts famous.

Nonetheless, there are notable dangers related to launching a PS5 Professional.

Sony’s president has beforehand acknowledged that there aren’t any plans to change the core semiconductor processes of the PS5. Whereas some changes to the semiconductors and system design are attainable, these adjustments are unlikely to lead to important value reductions.

As well as, the introduction of a dearer mannequin may gradual adoption charges as a consequence of decrease gross sales volumes. The current worth hikes for the PS5 in Japan additionally contradict the everyday stock discount methods that precede a brand new product launch.

Traditionally, bulletins of console upgrades have positively impacted Sony’s share worth.

“It might be, in our view, that the announcement of the PS5 Professional is nicely obtained,” analysts highlighted.

“Whether it is introduced, our focus could be on enhancements within the CoGS construction and efficiency and on the resultant alternatives for increasing recreation software program.”