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Tuesday, August 30, 2022

PlayStation 5's Price Should Increase in the USA, Too!

By LUDWIG VON KOOPA - C'mon, man. Who are you trying to impress by making it seem like America doesn't have an inflation problem?

A week ago, Sony Interactive Entertainment announced an effective immediately price increase in basically every region that matters—with the exception of the United States of America. It's even in Canada and Mexico! They blame high inflation rates. These price increases are around 10-ish percent, depending on where you are. This is on top of premium PlayStation 5 titles already being more expensive than previous generations.

Apparently, Sony doesn't believe that the United States is suffering high inflation rates right now. I can tell you that the United States Dollar has a higher inflation rate right now than several of the countries that are facing a price increase due to high inflation, especially Japan, and the dollar's inflation is about on par with the European market. It doesn't make sense.

It's also bad economics. Sony in the same announcement said their “top priority continues to be improving the PS5 supply situation so that as many players as possible can experience everything that PS5 offers and what’s still to come.” And I can confirm that supply problems continue to be an issue with a bit of quick research I did:


PlayStation 5 supply August 2022 Amazon Sony GameStop Target Walmart Best Buy sold out
As of August 30, the PlayStation 5 is sold out at Best Buy, Target, GameStop, Amazon, and Sony's direct site.
The PlayStation 5 does appear to be available at Walmart, but at significantly higher markup than normal ($675 vs. $500).


I've been saying for years that when you're dealing with low supply and high demand (and/or a scalper situation), that the economically sensible thing to do is raise prices. (And regret that you didn't set prices higher to begin with.) You see, normal companies price high to begin with and decrease the price of their goods over the product's lifecycle. Sony is an abnormal company and made a mistake in their pricing tactics, and now they're being mocked by everyone for it.

Still, the price should've been higher all along, and that's especially true for the United States. If Sony can sell PlayStation 5s at higher prices at their low supply, then they should. And if you look at the second-hand market, it's clear many people are willing to buy PlayStation 5s at higher prices. You just need to expect some people will illogically be upset immediately after you reduce your price—they should have been satisfied with the price they originally paid (and with associated bragging rights of being able to have a hot piece of tech earlier than almost everyone else), or else they should've never bought it to begin with. For example, the 3DS went overboard when they reduced their price from $250 to $170 AND they had those ambassador games for people who bought early. Rather than look at price cuts as a point of shame, they should be a preplanned tactic.

But, yes, price increases should be a point of shame. Sony should be ashamed. But if they're going to cite inflation as their reasoning, they really should also increase the price of the PlayStation 5 in the United States of America. Right now, they are not only economically stupid, but their reasoning is easily torn apart and thus untrustworthy and not credible, which destroys Sony's brand relationship with customers and the wider industry. And one also wonders why Sony is the only company doing this and its competitors aren't following suit...



Ludwig's “the price should've been higher to begin with” stance is sure to be unpopular with a lot of people, even if it's the economically valid point of view and would mean greater supply availability of the PlayStation 5 early on. If you're one of the people who doesn't like this point of view, feel free to yell at Ludwig in the comments section. He'll at least read and reply to what you have to say. But you're also welcome to comment if you agree with Ludwig. You may also speculate why Sony didn't raise prices in the United States. Maybe it's politically motivated?

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