Sony increasing the price of the PS5 in selected markets

[Azzanation]

the-pi-guy said:

Azzanation said:

I am still confused with what you are trying to say with your first paragraph.

The costs here seems to only exists with Sony at this moment, both Nintendo and MS came out and said they wont be raising their prices on hardware which means Sony has some special costs that doesn't exist with the other brands. 

When Xbox tried to raise the prices on Live, the fans stood up and Xbox backed down, when PS raised the prices of games to $70, the fans defended the decision and now Sony see this loyalty and are now raising the hardware prices and guess what, the fans are defending this decision. I can see what the issue is here.

I would throw out that Nintendo is almost certainly making a solid margin on their console. Whereas Sony and Microsoft aren't. 

The big advantage that Microsoft has, is that the US dollar is doing very well, and that is where MS sells most of their consoles. 

Sony sells a lot of their consoles in Europe. 

At launch, the PS5 was €500≈$600. Largely because of a 20% VAT, Europe was paying more, and Sony was getting around $500 from Europe. 

Currently though €550≈$550. Which means Sony is getting about $460. Even with the price hike, Sony is making less money on the consoles. 

I also haven't seen people defend the $70 games. 

Sony started making profits on the PS5 when they sold around 10m consoles

Sony Finally Turns a Profit on $499 PS5 - ExtremeTech

This isnt about inflation or economics. Sony's PR will be to defend this decision however when we look between the lines lets see what we find. Sony has already reduced its own cost on PS5's by reducing the weight and are planning on doing this again with a newer model meanwhile raising the costs. Mean while the Series X is still using the launch model with zero changes. Xbox are not planning on raising the price on a console that would cost more to manufacture. Yes MS can eat the costs but so can Sony. Sony earns billions each quarter and is far from a damaged brand. 

Playstation is constantly turning record profits and so raising the console price is not justified. They are happy to affect most countries instead of the US because the US is the main market in the world. Raising their price in the US while their direct competitor is just as strong in the US would be brand suicide. Sony know that the console will sell regardless, weather its sales from customers or sculpers. that $50 price hike is a huge turn over long term.

Consumers shouldnt have to pay for a corp constantly making record billions. Same goes for all brands.