Sony Considers Raising Product Prices To Make Up For Tariffs' Impact On Its Profitability
Its CEO also discussed the possibility of making PS5 in the US.
Sony
Sony, one of the "Big Three" console manufacturers, is likely to join the other two in raising the price of its gaming console soon, as its bosses hinted at the quarterly earnings call.
According to CFO Lin Tao, the increased tariffs are expected to reduce the company's profitability by roughly 100 billion yen ($512 million). This figure was obtained after they calculated the tariffs and considered "the current available information and looking at the market trend."
To manage the impact, they are taking various measures, such as passing the price to the customers and adjusting product shipment allocations at a global level. The company will also consider stockpiling strategic inventory in the United States and "raising prices on certain products with an eye on market trends."
When talking about the possibility of producing the hardwares locally in the US, CEO Hiroki Totoki said that they can "of course be produced locally", which, in his opinion, is an efficient strategy. However, it's hard to switch to this approach immediately, as "the PlayStation 5 is being manufactured in many areas [its components], so whether it's going to be manufactured in the US or not, it needs to be considered going forward in such a critical situation."
Market trends appear to be a significant factor influencing Sony's decision to raise prices. And the trend is quite clear: Nintendo's Switch 2 is set to launch in less than a month with a Manufacturer's Suggested Retail Price (MSRP) of $450, along with higher prices for software; Microsoft is also increasing the prices of Xbox Series X/S consoles, controllers, headsets, as well as its games later this year. So it's very likely Sony will follow, and it's just a matter of time.
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