If the tariff war between the United States of America and China elevates to a new level, then Sony might have to increase the price of the PlayStation consoles.
The Wall Street Journal reports that during an earnings call, Hiroki Totoki, Sony’s chief financial officer, said that if Donald Trump, the president of the United States ends up introducing another round of tariffs, then they might have to resort to increasing the consoles’ prices, as they might be impacted by a 25% (but at least a 10%) tariff. „Most of the components of PlayStation consoles are made in China. We believe, and therefore have told the U.S. government, that higher tariffs would ultimately damage the U.S. economy,” Totoki said.
The talks between the US and China will continue this week, and Sony is preparing for the worst-case scenario, and if Trump comes away from the table with a bad taste in his mouth, the consoles will be tariffed, even though Nintendo, Sony, and Microsoft wrote a joint letter to make him reconsider his decision. „A 25% price increase in consoles to match the tariff cost would likely put a new video game console out of reach for many American families who we expect to be in the market for a console this holiday season,” the companies wrote in the letter. Nintendo has already officially responded by partially shifting the production of the Nintendo Switch (and the upcoming Nintendo Switch Lite, due to launch in September) from China to Vietnam.
Sony probably reduced its fiscal year shipping expectations of the PlayStation 4 because of the pessimistic outlook they have from 16 million to 15 million units (we discussed this, as well as how the PS4 is the fastest console so far to hit 100 million sales), and the US is one of the key markets for the gaming industry. If Trump introduces the tariffs, Europe might either become a more important market, or they might also get a price hike.