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Analyst predicts PS5 price increase ‘will have minimal impact on sales’

Lunatic_Gamer

Gold Member



Citing the challenging global economic environment, on Thursday Sony said it had “made the difficult decision” to raise PS5 prices in Europe, Japan and parts of North America, although not the US, effective immediately.

Responding to the news, Piers Harding-Rolls, Ampere’s research director for games, predicted that pent-up demand for Sony’s console meant the company was unlikely to alter its PS5 sales forecast.

“While we believe there will be disappointment for some consumers that have been trying to buy a PS5 without success, or that were saving to buy the console just in time for the price to increase, the high pent up-demand for Sony’s device means that this price increase of around 10% across most markets will have minimal impact on sales of the console,” he wrote. “We expect Sony’s sales forecast for the PS5 to remain unchanged.”

“Given the facts that the PS5 has been severely supply constrained since launch, with many consumers unable to buy Sony’s latest console, and the fact that Microsoft has shown no indication yet of increasing its Xbox Series pricing, there is no doubt that this price increase will have been a hard decision to make,”
Harding-Rolls said.



“However, with inflation and price increases being felt through the component supply chain, much of that priced in US dollars, alongside continued high costs in distribution, Sony has now had to pass on some of those cost increases to try and maintain its hardware profitability targets.”

He added: “Although wide ranging, the PS5 price increases are relatively nuanced and are taking place in markets where the impact is being felt the most with an added layer of squeeze coming from the strength of the US dollar.”

“Price increases will take place in at least 45 markets globally, but not in the US, due again to the strength of US dollar currency. The US is the biggest console market globally, and where Sony competes with Microsoft most closely for market share.”

Reality Labs increased the price of its Meta Quest 2 VR headset by $100 this month, a decision it attributed to rising manufacturing and shipping costs.

 

Pelta88

Member
The global price increases and inflation suck. Period.

But in terms of this luxury item, there is a difference in mindshare that people refuse to factor in to the PS5. Here in the UK the momentum behind the console kinda negates the price increase. Wrongly or rightly.
 
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Obviously. People have been paying way over MSRP already.

These companies aren't dumb. They have analytic experts to have a good idea how this would pan out.

But, still, I bet Sony is happy Meta went first and with a much steeper increase.

They honestly should increase it worldwide, including the US.
 

Elios83

Member
This is obvious. People have been buying the console at scalpers prices (>700€) for two years.
It's still impossible to find one in stores.
They're the only ones actually releasing big games this year while all the others including big third parties are basically skipping the year.
The material impact of the price increase will be meaningless, the worst it's gonna happen is that we'll be able to find some units in stock for a couple of days.
And that's why they're doing it, it has zero impact on sales in the short term while not doing it would force them to cut profit forecasts again.
Euro now has less value than the dollar, european prices are also tax included while american prices are not. And that's not counting the cost of energy that has doubled and transports.
Once they'll reach a situation where sales are below their targets price will go down again but that's not happening anytime soon.
 
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reksveks

Member
What is sonys forecast anyway? 16m? I think they could hit that easily if they were able to produce them.
18m for the FY, 3 quarters to hit 15.6m (got 2.4m in the first Q)

Personally I got some doubts after July's numbers but will see what August and September bring.
 
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Jormatar

Member
No surprise here. Casual people don't really care or even know about PS getting 10 percent price increase. If anything 10 percent price increase is small compared to everything else out there.

Hardcore gamers will care and will keep bitching as they should, yet they can't escape the fact PlayStation's first party output is unmatched and If they want to play the best games out there day one, they will need a PS5.

So in the end, nothing will really change. Well played, PlayStation... well played.
 
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Gamerguy84

Member
Once this does well at $500, you can forget seeing a PS5 Pro at that price. Most likely $600-$650.
I dont mind spending money on anything that returns my investment in enjoyment.
Only got mine today, just in time it seems.
PS direct? They are still in stock if so. I told a couple people and i know of 7 that came from it in the last 36 hours. 3 of them being xmas presents.

...

On topic a 10% increase wont have any affect. Way more useful for ammo in the great console war.
 

Corndog

Member
The global price increases and inflation suck. Period.

But in terms of this luxury item, there is a difference in mindshare that people refuse to factor in to the PS5. Here in the UK the momentum behind the console kinda negates the price increase. Wrongly or rightly.
I agree. It won’t have much impact at all in the short term. It also gives them more room to lower prices in the future.
 

Fahdis

Member
So many apologists in this thread. This is the reason we will always get cucked as gamers (even though $50 is nothing, this will only help them validate their already oversized egos and wallets). Someone even called this a "luxury item" when the competitor has a better overall ecosystem and cost basis at the moment. Good luck to all of you paying $699 for the next Sony Console.
 

Corndog

Member
So many apologists in this thread. This is the reason we will always get cucked as gamers (even though $50 is nothing, this will only help them validate their already oversized egos and wallets). Someone even called this a "luxury item" when the competitor has a better overall ecosystem and cost basis at the moment. Good luck to all of you paying $699 for the next Sony Console.
I agree, but people will still pay it.
 

Kagey K

Member
In a vacuum, I agree the 10% here isn't that bad, the problem is that it's 10% here, 10% there and 10% there, consumers are being pinched, squeezed, and nickeled and dimed in every facet of our existence.

It's not that 1 thing becomes unaffordable it's the combination of everything rising that makes all of it unaffordable at once. Everyone keeps blaming inflation, but raising prices contributes to the inflation, and the cycle doesn't end.
 
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jm89

Member
Don't believe that 18m shipped number by fiscal year end, even if we take out the holidays they are gonna have to sell something like 400-500k a week on regular season to reach it.

Rememeber last fiscal year they missed their shipment target by something like 1.5m. Tbh even if they miss it by 2m, 16m by fiscal years end is still impressive.
 
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N30RYU

Member
sony could have just bundled any future PS+ release with any new console and up the overall price instead of end up looking greedy.

that's on Jim
 
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Loxus

Member
I'd pay another $920 without even thinking about it.

It really is that nice of a device. $500-550 for it still seems like an absolute steal to me.
I know right.
I've seen headsets and controls cost nearly as much as the PS5.
A GPU alone with similar performance cost the same as the whole PS5 as well.

I believe if Console gamers wasn't so concerned about price, we would have more powerful Consoles at $600.
 

Topher

Gold Member
This is why Sony can do as they please.

$10 increase on games? It’s only $10 guys.

Console price jacked up considerably? No big deal guys.

That’s fine if you don’t mind paying, but you’re exactly the type of customer they want.

Why? Because he is saying this won't have any affect on sales? That's what the analyst in the article is saying as well. Simple fact of the matter is that demand is still outpacing supply by a great deal. So saying this won't affect sales isn't a Sony fanboy take, it is just reality.

Now that doesn't mean it isn't a stupid thing to do. I think it is absurd to hand yet another advantage to your competitor. But that's a different thing than understanding the market climate and understand that people are already paying more for consoles than MSRP.
 
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In a vacuum, I agree the 10% here isn't that bad, the problem is that it's 10% here, 10% there and 10% there, consumers are being pinched, squeezed, and nickeled and dimed in every facet of our existence.
They made a good product that is on demand, they keep making good games that drives that demand even higher.

Same goes for Nintendo they can charge a good chunk of money for ancient hardware with huge margins on both hardware and games.

While Sony can afford to increase the price and Nintendo can afford huge margins other companies are forced to push deals or top deals in an attempt to move products that are way cheaper to keep pace, that's how it is.
 
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Kagey K

Member
They made a good product that is on demand, they keep making good games that drives that demand even higher.

Same goes for Nintendo they can charge a good chunk of money for ancient hardware with huge margins on both hardware and games.

While Sony can afford to increase the price and Nintendo can afford huge margins other companies are forced to push deals or top deals in an attempt to move products that are way cheaper to keep pace, that's how it is.
You obviously missed my point and I'm not here to console war with you.
 

Markio128

Member
Yep, those PS5s that went on sale from CEX in December 2020, that came without a box. Because that's exactly the first thing any legitimate PS5 owner would do - destroy the box.
I often look in the window of my local. This is similar to what the employees see from the other side:
GIF by MOODMAN
 
This is obvious. People have been buying the console at scalpers prices (>700€) for two years.
It's still impossible to find one in stores.
They're the only ones actually releasing big games this year while all the others including big third parties are basically skipping the year.
The material impact of the price increase will be meaningless, the worst it's gonna happen is that we'll be able to find some units in stock for a couple of days.
And that's why they're doing it, it has zero impact on sales in the short term while not doing it would force them to cut profit forecasts again.
Euro now has less value than the dollar, european prices are also tax included while american prices are not. And that's not counting the cost of energy that has doubled and transports.
Once they'll reach a situation where sales are below their targets price will go down again but that's not happening anytime soon.
All of this is wrong.


Once it hits (insert adjusted price) it will not go down unless Xbox severely impacts Sony's sales. It is the way of price increases.


I wish you guys would stop postulating. Just once :)


I'm now a page behind but I get hit with probably 20 MFGR price increases a month, easily. Sony is not going to suck that up as I'm sure they are selling at a 12-15% profit margin and banking on residuals on game sales.


But ya know. Fire on and tell me what I'm wrong about.
 
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