Sony has announced that it is contemplating price increases due to the significant impact of tariffs on its operations. In the financial results for the fiscal year ending March 2025, and during a subsequent Q&A session with investors, Sony executives elaborated on the effects of these tariffs.
Chief Financial Officer Lin Tao revealed that the tariffs are expected to cost Sony approximately 100 billion yen (around $685 million), primarily because of the company's extensive involvement in hardware manufacturing, including the PlayStation 5. Tao hinted at the possibility of passing some of these costs onto consumers through higher hardware prices, including the PS5.
Tao stated, "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. So we are taking different measures in managing to come up to the 100 billion yen impact."
Sony CEO Hiroki Totoki also addressed the situation, particularly concerning the PlayStation, suggesting that manufacturing consoles in the U.S. could be a strategy to circumvent the tariffs. "These hardware of course can be produced locally," Totoki noted. "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, especially the PS5 Pro, could see a price hike. This has prompted some consumers to purchase the console preemptively.
Daniel Ahmad, director of research and insights at Niko Partners, noted that Sony has already increased console prices in several 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, pointed out that the PS5's production in China makes Sony vulnerable to U.S. tariffs. "PS5 hardware is predominantly manufactured in China, exposing Sony's supply chain to greater risk from tariffs originating from the U.S.," he explained. "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 added, "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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