Is the PS5’s global price increase coming to the U.S. market?

The price of the PlayStation 3’s most popular model was reduced by $100 three years later. This was only the second time such a price reduction had been made. The price of the PlayStation 4 fell $50 two years after its launch.

Barely two years into the PlayStation 5’s reign, Sony has announced that the price of its hard-to-find console is going Up. This unusual action is similar to the PlayStation 3 or PS4 except that there are many factors and powers at play. The price increase is affecting every market Other than United States. So while American buyers probably shouldn’t expect a $50, much less $100, discount once the PS5 turns two, or maybe even three years old, should they also expect to get dragged into a situation involving supply chains, currency values, and investor anxieties?

Daniel Ahmad, a senior analyst based in for the Shanghai-based games research firm Niko Partners, isn’t so sure. “A price increase in the U.S. is unlikely given the strength of the U.S. dollar,” against other currencies, and that most likely drove the initial MSRP increase. It hit Europe, where the dollar and Euro are 1:1 for the first time in 20 years, for €50 more; touched the U.K. (where the pound is the lowest against the dollar it has been since 1985) for £30 more; and tagged Japan for another ¥5,500 yen.

Ahmad wrote to Polygon that the United States was the biggest console market and also one of the most competitive. This makes any price rise there more risky. Michael Pachter from Wedbush Securities is a more cautious industry analyst. He also has a lot of experience with the gaming market.

“If they have a chance to raise price in the U.S., [Sony] probably will do so, but raising price is SUCH a dumb idea,” Pachter said in an email. “I’m hopeful they learn their lesson and keep it limited to the other markets.”

As for why Sony would go along with something consumers wouldn’t want (to say nothing of the fact he considers it a bad move) Pachter noted that Sony’s earlier decisions to price games at $70 and bail out of E3 activities (before COVID canceled them) are moves that also alienate consumers, but Sony seems able to make them without taking much punishment near term. Simply put, the PlayStation 5 is still in high demand, even though the retail price for a bundle console or newer model from an alternative market may be higher than that.

“We continue to see high demand for the PlayStation 5 in all markets we analyze and we anticipate, should supply conditions improve,” Ahmad said, “that Sony will still be able to meet their unit sale targets despite the price increase given demand still outweighs supply.” The price hike in the non-U.S. territories, he speculated, was likely done “to keep hardware profitability stable and hit targets set for the [fiscal year].”

Ahmad observed that although Sony informed investors last year it would no longer be selling the disc drive PS5 model at profit, its discless digital-only unit remains being sold at loss. “It’s likely that Sony increased the price of the console to keep hardware profitability stable and hit targets set for the [fiscal year],” Ahmad added.

Pachter concurred in part. “They had planned to be profitable by now [on the PS5] so were on track, but I presume they are making less than they planned for, so they decided to shift the burden to consumers,” Pachter said.

And getting back to satisfying white hot demand, which either keeps a price hike in the U.S. at bay, and might bring them back down elsewhere, the console’s design may yet stand in the way of stabilizing the supply chain. “Sony and Nintendo designed their consoles to use proprietary chips for mundane functions like Bluetooth,” Pachter said, “and the supply chain hit them harder because they couldn’t substitute many of these chips.”

The fact the price increase affects every market but the U.S. seems to acknowledge Sony sees a very competitive market there, where Microsoft hasn’t battled the same kind of supply issues (but, of course, hasn’t sold as many units, either). Bleeding U.S. customers for another $50 on the PS5 likely wouldn’t affect its demand that much, Pachter said.

However, it could send a different message to families about the benefits of a pricier device, which has its own subscription that can be managed and an Xbox Series X equipped with Game Pass. It would be “one more reason to sign up for Game Pass instead of buying a PS5,” Pachter said, “and the timing is questionable.”