Rising Inflation Pushes Sony To Hike Price Of Its Playstation 5 Console

The PlayStation 5 game console’s recommended retail price was increased by Sony on Thursday in a number of international markets, citing the challenging global economy and high inflation.

The price increases took effect immediately, with the exception of Japan, where they started on September 15. Sony won’t be raising the PS5’s price in America.

“The global economic environment is a challenge that many of you around the world are no doubt experiencing,” Sony said in a blog post. “We’re seeing high global inflation rates, as well as adverse currency trends, impacting consumers and creating pressure on many industries.”

The company announced that it has decided to increase the price of its flagship console “based on these challenging economic conditions.”

Sony’s price increase coincides with a downturn for gaming companies like Nintendo and Microsoft, whose sales declined in the second quarter as the pandemic’s boom started to fade.

In the June quarter, sales at Sony’s gaming division fell 2% year over year while operating profit fell by almost 37%. The Japanese goliath reduced its gaming division’s full-year profit forecast as well.

It is challenging for Sony to produce enough PS5 consoles to meet demand due to ongoing supply chain issues. There has been a noticeable PS5 shortage worldwide.

Microsoft’s competitor Xbox has not yet disclosed any price increases.

There is no reason to suspect that this price increase will have been difficult to decide on given that “the PS5 has been severely supply constrained since launch, with many consumers unable to buy Sony’s latest console, and the fact that Microsoft has shown no indication yet of increasing its Xbox Series pricing,” wrote Piers Harding-Rolls, research director at Ampere Analysis, in a note on Thursday.

“However, with inflation and price increases being felt through the component supply chain, much of that priced in US dollars, alongside continued high costs in distribution, Sony has now had to pass on some of those cost increases to try and maintain its hardware profitability targets.”

According to Ampere Analysis, Sony sold 21 million PS5 consoles globally, compared to 13.8 million Xbox Series consoles.

Given the continued high demand, Harding-Rolls stated that he does not anticipate this to discourage gamers from purchasing a PlayStation 5.

“While we believe there will be disappointment for some consumers that have been trying to buy a PS5 without success, or that were saving to buy the console just in time for the price to increase, the high pent up demand for Sony’s device means that this price increase of around 10% across most markets will have minimal impact on sales of the console,” he said.

“We expect Sony’s sales forecast for the PS5 to remain unchanged.”

(Adapted from BusinessInsider.com)

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