Sony has announced it is contemplating price increases due to the significant impact of tariffs on its operations. The Japanese electronics giant disclosed its financial outcomes for the fiscal year ending March 2025, and during a subsequent investor Q&A session, executives delved into the repercussions of the tariffs imposed by the Trump administration.
Chief Financial Officer Lin Tao revealed that the tariffs could cost Sony approximately 100 billion yen (around $685 million), based on the tariffs currently in place. Given Sony's extensive involvement in hardware production, including the PlayStation 5, these tariffs pose a substantial challenge.
Tao hinted that Sony might transfer some of these costs to its hardware prices, potentially affecting the PS5."In considering the tariff impact, we're not just looking at the direct costs to arrive at the 100 billion yen figure," Tao explained during the investor webcast. "We're also evaluating current market trends and considering adjustments to pricing and shipment strategies to manage this impact."
Sony's CEO, Hiroki Totoki, specifically addressed the PlayStation, suggesting that manufacturing consoles in the U.S. could be a way to circumvent the tariffs.
"These hardware products can certainly be produced locally," Totoki stated. "While the PS5 is currently manufactured in various locations, the possibility of producing it in the U.S. is something we need to consider moving forward. We're not at a critical juncture yet."
Sony's Hiroki Totoki is contemplating U.S. production for the PS5 to dodge tariffs. "It needs to be considered going forward" pic.twitter.com/c1cEQIwXA4
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Analysts have indicated to IGN that Sony might follow the lead of Nintendo and Microsoft by increasing game prices to $80. There's also speculation about a potential price hike for the PS5 family of consoles, particularly the PS5 Pro, prompting some consumers to purchase it preemptively.
Daniel Ahmad, Director of Research and Insights at Niko Partners, noted that Sony has already adjusted its console prices in several regions outside the U.S., but a U.S. increase could be on the horizon.
"Sony has implemented multiple price increases for its consoles outside the U.S.," Ahmad said. "While both Sony and Microsoft are hesitant to raise prices in the U.S. due to its critical market size, we wouldn't be surprised if Sony eventually raises the PS5 price there as well."
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James McWhirter, Senior Analyst at Omdia, added that the PS5's manufacturing primarily takes place in China, making Sony vulnerable to U.S. tariffs. However, he pointed out that a significant portion of console sales occur in the fourth quarter, providing both Sony and Microsoft some buffer time to manage their existing stock.
"PS5 hardware is mostly produced in China, which increases Sony's exposure to U.S. tariffs," McWhirter explained. "Historically, up to half of console sales happen in Q4, giving companies like Sony and Microsoft a chance to use their current inventory. In 2019, consoles were temporarily exempted from Chinese tariffs, but this only took effect in August."
"With Microsoft having already adjusted prices this week, it sets a precedent for Sony to possibly follow suit with the PS5," McWhirter continued. "This decision will be particularly challenging in the U.S., the largest console market, which has largely been insulated from price hikes, except for the $50 increase in the PS5 Digital Edition in late 2023."
