A US PlayStation 5 price hike looks more likely after Sony lifts prices in Europe
Sony said it’s hiking the price of PS5 consoles in markets including the UK, Europe, Australia, and New Zealand.
Console prices are officially on their way up. Sony on Sunday announced that the price of its nearly five-year-old PS5 console would see double-digit percentage hikes in Europe, Australia, and New Zealand.
The new prices are effective Monday.
Digital editions of the console will rise by between the equivalent of $50 and $75 in most of the markets. According to Sony, the standard disc version console and the pricier Pro console will remain the same price.
An estimated 70% of PS5s are produced in China, which now faces a 145% levy from the US. Rival Nintendo has delayed US and Canadian preorders for its upcoming Switch 2 console and has diverted nearly all of its Vietnamese production to the US.
The Trump administration’s sweeping tariffs likely have a lot to do with the price hikes, and this could be a way for Sony to spread out the cost burden of the levies across markets, to avoid slapping the US — the biggest console market — with debilitating price bumps. Sony’s blog post announcing the shifts only mentions “high inflation and fluctuating exchange rates.”
Since the PS5’s global launch on November 12, 2020, the value of the Chinese yuan has declined by 9.4% relative to the British pound and 6.2% versus the euro, but is up 6.1% and 3.7% compared to the New Zealand and Australian dollars, respectively.
It brings to mind the idea of “excuseflation” — companies using a high-profile event as the reason to push through price increases in a bid to protect or increase profit margins. That’s something we saw play out in earnest during the recent bout of inflation. However, with consumers’ balance sheets in a weaker position compared to where they were in 2022, the scope for companies to raise prices without having a negative effect on volumes sold appears more limited this time around.
Analysts expect that a PS5 price hike for the US won’t be far behind, with Kantan Games CEO Serkan Toto telling CNBC he “would be very surprised if Sony was able to keep the PlayStation prices in the US stable.” The tech giant hasn’t had the smoothest time selling the console, which launched in the peak of the Covid pandemic and faced significant supply issues. It’s gained ground in recent years and its sales pace isn’t far off from the PlayStation 4.
Video game consoles were granted exemptions from tariffs on goods from China during President Trump’s first administration, though the White House seems less interested in making exceptions this time around.
