Three years after the launch of the PlayStation 3, Sony lowered the price of its most popular model by another $100. This was the second such price cut up to that point. Two years into its life, the PlayStation 4 is down $50.
Barely two years after ruling the PlayStation 5, Sony announced that the price of the hard-to-find console is on its way above. Like the PlayStation 3 and PS4, there are different circumstances and different powers that lead to this unusual move. But the price hike hits all markets Except United State. So while US buyers likely won’t expect $50, or much less than $100, a discount once the PS5 is two years old, or maybe even three, if they also expect to be dragged into a situation that includes supply chains, currency values, and investor concerns. ?
Daniel Ahmed, chief analyst at Shanghai-based gaming research firm Nikko Partners, isn’t entirely sure. “A price increase in the US is unlikely given the strength of the US dollar” against other currencies, and this likely led to an increase in the initial MSRP. hit Europe, where the dollar and the euro 1:1 for the first time in 20 years, for another 50 euros; touched the UK (with sterling at its lowest against the dollar since 1985) for another £30; Japan marked another 5,500 yen.
In an email to Polygon, Ahmed noted that the United States is the largest market for consoles, and one of the most competitive, making price increases there all the more risky. But another industry analyst very familiar to the gaming public, Michael Patcher of Wedbush Securities, is somewhat more pessimistic on behalf of consumers.
“If they have a chance to raise prices in the United States, [Sony] He probably would, but raising the price is a stupid idea,” Butcher said in an email. “I hope they learn the lesson and keep it limited to other markets.”
As for why Sony should go along with something consumers don’t want (not to mention the fact that he considers it a bad move) Pachter noted that Sony’s previous decisions to price games at $70 and bail out of E3 activities (before COVID canceled them) are moves that also alienate consumers, But Sony appears to be able to do it unpunished in the near term. The simple fact is that the PlayStation 5 is still in very high demand, even when consumers are paying more than the shelf price for a bundled console, or a new console from a secondary market.
“We continue to see high demand for PlayStation 5 in all the markets we analyze and we expect, should supply conditions improve,” Ahmed said, “Sony will still be able to meet its unit sales targets despite the price increase as demand It’s still oversupplied.” He speculated that the price hikes in non-US regions were likely “to maintain stable profitability of the devices and achieve the objectives set for [fiscal year]. “
Ahmed noted that while Sony told investors a year ago that it was no longer selling the disc-powered PS5 model at a profit, its digital-only discless unit was still selling at a loss. “It is possible that Sony has raised the price of the console to maintain stable hardware profitability and achieve the objectives set for [fiscal year]Ahmed added.
Buchter partially agreed. “They planned to be profitable so far [on the PS5] So they were on the right track, but I’m assuming they’re earning less than they planned, so they decided to pass the burden on to consumers,” said Butcher.
Returning to satisfying white-hot demand, which either keeps prices high in the US and may cause them to fall again elsewhere, the console design may stand in the way of supply chain stability. “Sony and Nintendo designed their consoles to use proprietary chips for normal functions like Bluetooth, and the supply chain hit them harder because they couldn’t replace many of those chips,” Pachter said.
The fact that price increases affect every market but the US seems to acknowledge that Sony sees a very competitive market there, Microsoft hasn’t struggled with the same kind of supply issues (but, of course, didn’t sell many units either). Butcher said US customers bleeding another $50 on the PS5 likely won’t affect its demand that much.
But it will send another message to families about the value of the higher-priced console, with its own management subscription, and the Xbox Series X with Game Pass as an option. “It would be more reason to sign up for Game Pass than buy a PS5, and the timing is questionable,” Butcher said.
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