Sony May Raise Prices Due to $685M Tariff Impact; PS5 Cost Could Increase

Sony, a leading Japanese hardware and software company, has announced that it is contemplating price increases due to the significant impact of tariffs on its operations. In their financial results for the fiscal year ending March 2025, and during a subsequent Q&A session with investors, Sony's executives elaborated on the effects of these tariffs.

Chief Financial Officer Lin Tao revealed that the tariffs could cost Sony approximately 100 billion yen, which is around $685 million, based on the tariffs currently in place. Given Sony's extensive involvement in hardware manufacturing, including the production of video game consoles like the PlayStation 5, these tariffs pose a substantial challenge.

“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 situation, specifically mentioning the PlayStation brand. He suggested that manufacturing 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.”

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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Industry analysts have speculated to IGN that Sony might follow the lead of Nintendo and Microsoft by increasing the price of their games to $80. There is also speculation that the PS5, particularly the PS5 Pro, could see a price hike. This has prompted some consumers to consider purchasing the console before any potential price increase is announced.

Daniel Ahmad, director of research and insights at Niko Partners, noted that Sony has already raised console prices in certain regions outside the U.S. He expressed that while there is hesitation to raise prices in the U.S. due to its significant market size, Sony might still decide to increase the PS5's price in the U.S.

“Sony has raised the price of its console multiple times outside the U.S.,” Ahmad 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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View 14 ImagesJames McWhirter, senior analyst at Omdia, added further insight into the situation. He pointed out that the PS5 is primarily manufactured in China, which makes Sony's supply chain vulnerable to U.S. tariffs. However, he noted that a significant portion of console sales occur in the fourth quarter, providing some buffer time for Sony 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 mentioned that Microsoft had recently adjusted its prices, which could pave the way for Sony to do the same with the PS5. He emphasized that this would be a challenging decision in the U.S., the world's largest console market, which has generally been spared from significant price increases, aside from a $50 increase for the PS5 Digital Edition in late 2023.