Recently Sony CFO Lin Tao stated that Sony is currently looking at the strong possibility of raising PlayStation 5 prices due to the current uncertainty around the tariffs being issued by the United States, as previously covered here if you need more context.
Regardless of their recent financial successes, after reviewing its latest quarterly earnings, Sony must raise approximately 512 million dollars to make up the difference impacted by the tariffs. With many companies claiming the same, it’s curious whether or not the tariffs are truly to blame, or if they have recently become the fashionable and all-too-convenient scapegoat, as only recently Sony was blaming rising development costs to meet players’ expectations of ever-evolving triple-A games.
According to CFO Tao:
“In terms of the tariffs, we are not just simply calculating the simple tariffs to come up with 100 billion yen, but are thinking about the current available information and looking at the market trend, we may pass the price and also shipment allocation. So we are taking different measures in managing to come up to the 100 billion yen.”
Sony’s CEO Hiroki Totoki also spoke on the tariffs, stating:
“These hardwares can of course be produced locally, I think that would be an efficient strategy, but the PlayStation 5 is being manufactured in many areas, so whether its going to be manufactured in the US or not, it needs to be considered going forward in such a critical situation.”
Sony is at least considering the option of reigning in some of the international aspects of PS5 production and considering opting for U.S. Manufacturing, which is essentially what the tariffs are all about; Enticing companies to do business in the United States and eventually leading to strong economic growth following an increase in U.S. based production.
Xbox just last month, announced price increases for all of its hardware including consoles and accessories due to the increased tariff prices as detailed here, and Nintendo is introducing $80 dollar first-party games for the upcoming holiday season while pricing the upcoming Switch 2 at $450 a piece, with the blame once again falling on these tariffs and the uncertain future for the gaming and tech industry due to its heavy reliance on cheap international labor and resources.
With that said, perhaps the simplest option for Sony would be to follow suit with Microsoft and Nintendo and hike up their prices to help see them through the short-term volatile effects of this new economic landscape, and hope that their fan-base is willing and/or able to afford the increases. Either that, or they need to make some serious decisions regarding the future of their brand and calculate the costs of picking up and moving shop to the states.
I personally think the best option would be to move production and manufacturing to the United States, increasing revenue for the companies and decreasing cost to the consumer (that’s us, the gamers who have to pay for all this), while also allowing for financial restructuring and deeper analytical consideration for the working conditions of their employees and partners, and the quality of product being put out over the life-cycle of these companies.
