PlayStation 5 price: How does Sony choose what to charge?

How does a company like Sony decide something like the PlayStation 5's price. Is it just based on cost or do other factors play a major role?

Sony Playstation 5 Disc Version with Extra Controller and Charging Dock Bundle

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Explore uncharted virtual territories and slay dragons with this sleek Sony PlayStation 5 gaming console. The SSD allows ultra-fast load times, while

Sony Playstation 5 Disc Version Console with Dual Charging Dock Station and Pro Gamer Starter Pack Bundle

PlayStation 5 Drops Its Price for the First Time