Here's why the PlayStation 4 will cost $1850 in Brazil

There's a lot of outrage over how Sony could charge Brazil R$3999 for the PlayStation 4, but someone that actually lives in the country gives a thorough examination on the situation and justifies the high cost of the new console.

A 32-year-old Brazilian with the nickname "ManWithNoName" posted on the Destructoid community blog about how the country's government charges the most insane taxes in the world. That, along with import costs and added taxes on taxes, makes the cost so high.

See, this is how it works. When Sony bring the PS4 here, they pay the import taxes that can go up to 60% of the price. So a PS4 that costs 399USD goes up to 638,40USD. And that doesn't count the transportation, storage and port fees. After this initial taxes, when Sony sell it to retailers, there are a whole lot of new taxes, like PIS, IPI and Cofins. Those can go up to 40% of the imported price. And since Sony need to add their own cost of distribution and storage, which amounts circa 200USD, so we have 838,40+40% equals 1173,76. And them it have to go to retailers, who don't sell it here at low profits like 15USD. They have all their own costs, that are very high due to the insane Brazilian taxes. So they add their own costs, again something near 200USD, so 1373,76 more a lot of new taxes that can go up to 40% again equals 1923,26 USD.

The author believes that Sony could even be eating some costs to keep it under R$4000. It's a rough estimate, but just looking at the numbers blows the mind.

Microsoft's Xbox One will cost over $800 less for Brazilians, but that's due to the console being manufactured in Brazil. Obviously, they don't have to worry about import fees. The author states that Sony is "focused on the Chinese factories right now" and could manufacture PS4s sometime in 2014.

Sony explained why the retail price is so high in Brazil in an NPR article that was posted last night, citing that it gives the console a bad image. While it's good to hear it from the company, it's valuable to hear it from a casual person that's actually in the area.

[Image credit: Flickr]