Sony was recently asked about the possibility of a price increase for the PS5 during an earnings call to investors. The response was that given the current market pressures, the company wants to keep its options open. “In regards to a potential PS5 price increase, at this time I cannot share anything specific with you on pricing,” said Executive Vice President and Chief Financial Officer Hiroki Totoki.
This follows news that Sony has raised prices for consumer electronics including cameras, home theaters and headphones in a variety of different countries, particularly Japan. According to the company, these price increases are the result of an ongoing shortage of semiconductors and chips, in addition to various other factors that have led to a steady increase in the cost of raw materials, manufacturing and, more specifically, shipping over the past year.
Forrester vice president and research director Glenn O’Donnell predicted in May that prices for semiconductors and chips would rise as much as 15% this year. “Chipmakers are facing their own growing supply issues that are exacerbated by the war in Ukraine,” the analyst said. “Demand remains high while supply remains limited.” O’Donnell went on to say that “energy prices are also down, including electricity. The manufacture of chips requires an enormous amount of electrical energy.
Rising prices for semiconductors and chips could cause companies to raise prices for cars, consumer electronics, appliances and many other products, O’Donnell said. “Margins are already tight on these products, so they have no choice but to raise prices,” he said.
Global head of semiconductors at Accenture Syed Alam recently described how “products that use more advanced chips such as high-end GPUs and processors are likely to increase in price.” These are of course essential components of game consoles like the PS5.
Sony has just released its first quarter earnings report and its Game & Network Services department appears to have experienced a drop in sales, dragging down its operating profit. The department only managed to move about 2.4 million PS5 units between April and June, far less than expected. The company, however, said there would be no change from its previous sales forecast of 18 million units in the current fiscal year.
“There were two big constraints that were imposed on us,” Totoki said. “One was the availability of parts and components, the other was the supply chain. With the availability of parts and components, there are a lot of improvements, so we’re very optimistic about that. The executive added that “for supply chain disruption, we actually took a hit in the first quarter. beginning of the year, so the supply chain disruption is something that we hope will be completely resolved.
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