Sony Mulls PS5 Price Hike Due to $685M Tariff Impact

Sony has announced it is contemplating price increases due to the significant impact of tariffs on its business. The Japanese tech giant shared its financial outcomes for the fiscal year ending March 2025, and during the subsequent investor-focused Q&A session, its executives delved into the effects of the tariffs imposed by the Trump administration.

Chief Financial Officer Lin Tao revealed that the tariffs are expected to cost Sony approximately 100 billion yen, or about $685 million, based on the tariffs currently in place. Given Sony's substantial involvement in hardware manufacturing, including the popular PlayStation 5, these tariffs pose a significant challenge.

Tao hinted that Sony might pass some of these costs onto consumers through higher hardware prices, potentially affecting the price of the PS5 itself. "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's CEO, Hiroki Totoki, specifically addressed the PlayStation, suggesting that manufacturing consoles in the U.S. could be a strategy to mitigate the impact of 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."

Sony's Hiroki Totoki is considering producing the PS5 in the United States due to the Tarrifs. "It needs to be considered going forward" pic.twitter.com/c1cEQIwXA4

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Analysts speaking to IGN have indicated that Sony might follow the lead of Nintendo and Microsoft by increasing game prices to $80. There is speculation that the PS5 family of consoles, particularly the PS5 Pro, could also see a price hike. This has led some consumers to purchase the console preemptively, before any official announcement from Sony.

Daniel Ahmad, director of research and insights at Niko Partners, noted that Sony has already raised console prices in certain regions, but the U.S. market might be next. "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."

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James McWhirter, senior analyst at Omdia, added further context, stating, "PS5 hardware is predominantly manufactured in China, exposing Sony's supply chain to greater risk from tariffs originating from the U.S. 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, "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."