Sony Weighs PS5 Price Hikes and US Manufacturing Amid Tariff Challenges

Sony is currently facing significant financial pressure due to tariffs imposed by the United States on imports from China. The company anticipates a tariff-related cost impact of approximately 100 billion yen, or around $680 million, for the upcoming fiscal year.

To offset these costs, Sony is exploring several strategies, including increasing prices for consumers and relocating manufacturing operations to the United States. This shift aims to reduce exposure to tariffs and supply chain disruptions.

During an earnings call, Sony CFO Lin Tao acknowledged the possibility of passing tariff costs onto consumers but did not specify which products might be affected. However, the PlayStation 5 (PS5) console was specifically mentioned by CEO Hiroki Totoki as a candidate for local production in the US, describing it as an "efficient strategy" worth considering.

The PS5 has already seen price increases in regions such as the UK, Europe, Australia, and New Zealand, but not yet in the US. The tariff on Chinese imports into the US remains high at 30%, significantly impacting Sony’s gaming hardware, which is predominantly manufactured in China.

Sony shipped 18.5 million PS5 consoles in the year ending March 2025, a slight decline from the previous year’s 20.8 million units, bringing total lifetime shipments to 77.7 million. The company’s gaming division is particularly vulnerable to tariff impacts due to its reliance on Chinese manufacturing.

Comparatively, Microsoft has already increased Xbox console prices by up to $100 to address similar tariff pressures, while Nintendo has maintained stable pricing for its upcoming Switch 2 console. Sony’s forthcoming pricing decisions may become clearer with the launch of its new WH-1000XM6 headphones.

The potential move to US-based manufacturing represents a strategic pivot to mitigate tariff risks and supply chain vulnerabilities. By localizing production, Sony could reduce costs associated with tariffs, improve supply chain resilience, and potentially stabilize consumer prices in the US market.

This situation underscores the broader challenges global tech companies face amid shifting geopolitical landscapes and trade policies. It highlights the importance of agile manufacturing strategies and pricing flexibility to maintain competitiveness and profitability.