On Wednesday, Sony announced that both models of its PlayStation 5 (PS5) will launch in North America on November 12. The standard edition will retail for $499.99, while the all-digital version will be priced at $399.99. The announcement came at the end of a 40-minute video presentation that revealed trailers for several PS5 launch titles.

Just last week, Microsoft announced that its Xbox Series X would sell for $499.99. Many were skeptical that Sony could match the price. Sony has a history of pricing its games consoles above expectations – most notoriously when it priced the PS3 at $599 at launch and suggested consumers get a second job so they could afford it. An independent report found that a PC equivalent to the PS5 specs would cost over $600 to build. The report implies that Sony is taking a loss on the console by matching Microsoft’s price.

It’s not unusual for game manufacturers to sell consoles at a loss as the business model makes money on sales of software. While selling consoles at a loss is the market standard, few video game pundits expected that Sony – a company with a market cap of less than a tenth of Microsoft’s – would be willing to absorb a loss on the PS5.

In another surprise, Sony announced that the PS5 will be backward-compatible, allowing users to play upgraded versions of PS4 games on the console. While Microsoft has long touted Series X’s backward compatibility, many were doubtful that Sony would offer the feature on the PS5. The PS4 notably does not include backward compatibility while its direct competitor, the Xbox One, does.

Sony also introduced the PS5’s first-party launch lineup, which includes Spider-Man: Miles Morales and Sackboy: A Big Adventure. The company also featured several notable third-party console exclusives. Square-Enix titles Final Fantasy XVI and Project Athia, for example, will be available as console exclusives for the PS5.

PS5 pre-orders went up shortly after the presentation with retailers selling out of their allotted stock within hours. Sony has stated that it will have more PS5s available at launch, and some retailers say they will have more stock available in the coming weeks. However, that has not stopped individuals from purchasing pre-ordered PS5s on eBay for as much as $900.

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