Sony has announced that it is contemplating price increases due to the significant impact of tariffs on its operations. In its financial report for the fiscal year ending March 2025, and during a subsequent Q&A session with investors, Sony's executives elaborated on how these tariffs are affecting the company.
Chief Financial Officer Lin Tao revealed that the tariffs could cost Sony approximately 100 billion yen (about $685 million), primarily due to the company's extensive involvement in hardware manufacturing, including the PlayStation 5. Tao indicated that Sony might pass some of these costs onto consumers by raising the prices of its hardware products, including potentially the PS5.
"In terms of the tariff, we are not just simply calculating the simple tariff to come up with 100 billion yen, but thinking about the currently available information, and also looking at the market trend, we may pass on to the price, and also shipment allocation," Tao explained during the investor webcast.
Sony CEO Hiroki Totoki also addressed the issue, specifically mentioning the PlayStation. He suggested that producing consoles in the U.S. could be a strategy to circumvent the tariffs. "These hardware of course can be produced locally," Totoki stated. "I think that would be an efficient strategy. But PS5 is being manufactured in many areas. Whether it’s going to be manufactured in the U.S. or not, it needs to be considered going forward. We are not in such a critical situation."
Analysts have speculated to IGN that Sony might follow the lead of Nintendo and Microsoft by increasing game prices to $80. There is also anticipation that the PS5 family of consoles, particularly the PS5 Pro, could see a price hike. This has led some consumers to purchase the console preemptively.
Daniel Ahmad, director of research and insights at Niko Partners, noted that Sony has already raised console prices in regions outside the U.S. "Sony has raised the price of its console multiple times outside the U.S.," he said. "There is a reluctance from both Sony and Microsoft to raise prices in the U.S. given the size and importance of the market when it comes to console sales. That being said, we would not be surprised to see Sony follow suit with price increases on the PS5 in the U.S."
James McWhirter, a senior analyst at Omdia, highlighted the risks posed by tariffs to Sony's supply chain, given that PS5 hardware is mainly manufactured in China. He pointed out that a significant portion of console sales occur in the fourth quarter, which gives companies like Sony and Microsoft time to manage existing inventories. "PS5 hardware is predominantly manufactured in China, exposing Sony's supply chain to greater risk from tariffs originating from the U.S.," McWhirter said. "Yet what we consistently observe in the console market is that up to half of consoles are typically sold during Q4, the final quarter of the year. This bought both Microsoft and Sony more time to rely on existing inventories. In 2019, consoles were granted an exemption from tariffs on goods from China, but this ruling did not come into effect until August."
McWhirter also noted that Microsoft's recent price adjustments might pave the way for Sony to do the same with the PS5. "With Microsoft having blinked first with price readjustments this week, it now opens the door for Sony to follow with PS5. This is going to be a particularly tough decision in the U.S., the world's largest console market, which has historically been spared — save for PS5 Digital rising by $50 in late 2023."
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