Yahoo Finance Sony Lifts PlayStation Prices 19%, Joining Wave of Japan Hikes
(Bloomberg) -- Sony Group Corp. is raising the price of its marquee gaming console by about 19% to nearly $550 in Japan, one of the most dramatic signs that Asia’s No. 2 economy is emerging from a deflationary cycle.
Sony suggested a new price of ￥79,980 for its PlayStation 5, effective Sept. 2, in a big hike for a nearly four-year-old console that’s widely expected to get a more powerful mid-cycle revamp in coming months. The company also lifted prices of accessories like the DualSense wireless controller and Pulse wireless headset. Sony’s stock price rose 2.3% Wednesday.
It’s the latest sign that Japan is finally shaking off decades of deflationary business practices, tailored to unchanging salaries and a stable cost of living. Companies from Fast Retailing Co. to Toyota Motor Corp. are now lifting prices to adjust to higher costs for raw materials and components, and many are under pressure to raise pay as well.
Tokyo-based Sony in particular has resisted raising the price of its video game consoles at home, partly out of fear of alienating users. But on Tuesday it said it’s raising prices in light of “recent global economic fluctuations” and cost volatility.
The PlayStation price increases follow higher suggested retail pricing for Sony’s ranges of TVs, headphones and cameras since the start of this month. Microsoft Corp. also announced a price rise for its Xbox consoles in Japan earlier in August, making its Xbox Series X cost almost ￥67,000.
“The price hikes should at the very least encourage a wave of pre-price hike buying this quarter and is a small positive,” Andrew Jackson, head of Japan equity strategy at Ortus Advisors, wrote in a note after the announcement.
The PlayStation 5 got an unexpected boost in China with the release of Black Myth: Wukong a week ago, a record-setting new game available on PC and the Sony console. Its launch and a sales promotion by Sony helped PlayStation 5s sell out in a country that’s typically been reluctant to embrace console gaming. Wukong’s halo effect may also encourage more PS5 purchases globally as the game’s reach expands.
Sony may hit a new high in games division profit in the fiscal year to March, according to Bloomberg Intelligence analysts Masahiro Wakasugi and Takumi Okano. They see the company’s strong stable of first-party titles and a prospective price hike on PlayStation network services — required for online multiplayer play — as driving profitability alongside stringent cost controls.
What Bloomberg Intelligence Says
Sony’s game-division profit may reach ￥330 billion in fiscal 2025 ending March, 3% above guidance, on the strength of its PlayStation platform. It could further rise to a record-high ￥370 billion in fiscal 2026 due to its strong self-owned software titles. Our upside scenario shows it could achieve a record-high profit sooner, in fiscal 2025.
— Masahiro Wakasugi and Takumi Okano, BI analysts
Click here for the full research
--With assistance from Aya Wagatsuma.
(Updates with background)
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