Sony seems willing to absorb tariff hit from PlayStation console imports, may not raise prices

Sony may not raise prices on PlayStation 5 hardware in the United States, unlike its competitor who just hiked the Xbox Series X by $100.

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In a recent Q1'25 earnings call with analysts, Sony management says that it is unsure whether or not it will raise prices of PS5 consoles. The global tariff situation is unfolding and changing on what seems to be a monthly basis, and Sony says that it intends to "flexibly decide" on prices to reflect market conditions. Based on what was said, it's possible that Sony could absorb any potential hits from tariffs and not raise prices on consoles sold in the US--at least from now through the holiday season.

"We are diversifying our supply chain, as for consoles, we have already transferred console production [to regions outside China]. We intend to have this transfer completed by the first half of the year.

"Hardware sold in the US is now sourced outside China.

"In regards to the hardware pricing strategy, that really pertains to our future competitive strategy.

"It's very difficult to comment on this, but the overall thinking strategy is on annual profit, lifetime value, and also the sell-in volume and the expected content sales--all of these factors will be considered against the receptiveness of consumers to pricing.

"We would like to flexibly decide on prices."

Then again, it's also possible Sony could just raise prices anyway.

Sony has forecast PlayStation to make a record-breaking $3.5 billion in operating profit this fiscal year. Hardware sales are a substantial part of PlayStation's yearly earnings; in FY24, hardware made up 24% of yearly revenue. Profitability, on the other hand, is a different story.

It's implied that the PS5 Pro is sold at a profit given its $700 price tag, but how big these profits are remains to be seen.

In any case, Sony has telegraphed that it expects network services and third-party content to be major contributors to its FY25 profit forecast. The release of Marathon is also expected to help boost profits in FY25, but there's no guarantee the game will release by March 2026.