The pricing announcement sets the stage for a year-end showdown between Xbox and PlayStation, as consumers continue to flock to gaming optimised consoles offering exclusive titles.
Microsoft said last week Xbox Series X would go on sale on Nov. 10 priced at $499.99 with the less powerful Xbox Series S priced at $299.99, as Xbox bets that offering consumers choice will outweigh the risks run by launching two distinct devices at once.
The PlayStation 5 and the Xbox Series X have the same price, but the $399.99 PlayStation 5 Digital Edition "offers a substantial discount at no cost in terms of performance or hardware, besides the disc reader," said Guilherme Fernandes, analyst at gaming analysis firm Newzoo.
Hardware pricing decisions have won and lost generational console battles as makers look to build the critical mass of consumers that will attract games developers to their platform.
Sony, which is making a stylistic departure from recent generations with the predominantly white PlayStation 5, is offering the version without a disk drive as digital downloads become standard.
Upcoming titles unveiled for the console include platform exclusives "Final Fantasy XVI" from Square Enix, a new "God of War" title from Sony's Santa Monica Studio and a "Harry Potter" role-playing game.
The announcement bolsters PlayStation's lineup following the reveal of a slew of titles including Marvel's Spider-Man: Miles Morales from in-house studio Insomniac Games in June. That title will also be available on the PlayStation 4, Sony said.
Sony's "fantastic" games line-up shows it is "more aggressively betting on exclusives" with "Microsoft focused on cheaper entry prices to get users into the Xbox ecosystem," said Serkan Toto, founder of game industry consultancy Kantan Games.
With both companies seeking to drive recurring revenues, Sony said PlayStation Plus subscribers will have access to a back catalogue of titles from the aging PlayStation 4.
Gaming industry revenues have been on a tear among consumers staying home due to the COVID-19 pandemic, helping drive up Sony's shares 46% since its March lows.
Heading into the year-end shopping season "you are balancing a weak economy with a higher need for people to entertain themselves at home," said Carolina Milanesi, analyst at Creative Strategies.
The PlayStation 5 will go on sale on Nov. 12 in the United States, Japan, Canada, Mexico, Australia, New Zealand and South Korea and on Nov. 19 in the rest of the world.
By Sam Nussey and Supantha Mukherjee