Sony hikes the price of its PlayStation 5 console because of soaring inflation
Sony on Thursday raised the recommended retail price of its PlayStation 5 games console in several international markets citing the global economic environment, including high inflation.
The Japanese gaming giant said that the price hikes are effective immediately except in Japan where they will begin on Sep. 15.
Sony is not raising the price of the PS5 in the U.S.
“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 said that “based on these challenging economic conditions,” it has decided to raise the price of its flagship console.
These are the hikes and new prices for the PS5:
- Europe: 50 euro ($50) increase to 549.99 euros for the disc version and 449.99 euros for the digital version
- UK: £30 increase to £479.99 for the disc version and £399.99 for the digital model
- Japan: 5000 yen increase to 54,980 yen for the disc version and 44,980 yen for the digital model
- China: 400 yuan increase to 4,299 yuan for the disc version and 3,499 yuan for the digital model
- Australia: 50 Australian dollar increase to 799.95 Australian dollars for the disc version and 649.95 Australian dollars for the digital model
- Mexico: 1,000 Mexican pesos increased to 14,999 Mexican pesos for the disc version and 12,499 Mexican pesos for the digital model
- Canada: 20 Canadian dollars increase to 649.99 Canadian dollars for the disc version and 519.99 Canadian dollars for the digital model
Sony’s price hike comes amid a slump for gaming companies including Nintendo and Microsoft, which saw their sales slide in the second quarter as the pandemic-induced boom begins to wear off.
Sales at Sony’s gaming unit declined 2% year-on-year in the June quarter while operating profit plunged nearly 37%. The Japanese giant also cut its full-year profit forecast for its gaming division.
Sony is also contending with continued supply chain issues that make it difficult to make enough PS5 consoles to meet demand. There has been a notable shortage of PS5s globally.
Rival Xbox, which is made by Microsoft, has not yet announced any price hikes.
Given the fact “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, there is no doubt that this price increase will have been a hard decision to make,” Piers Harding-Rolls, research director at Ampere Analysis, wrote 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.”
Ampere Analysis estimates that Sony had sold 21 million PS5s worldwide compared to Microsoft’s Xbox Series consoles at 13.8 million.
Harding-Rolls said that he does not expect this to put off gamers wanting to buy a PlayStation 5 given demand remains high.
“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.”
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