No price hikes expected for game consoles in Japan despite high inflation rates

The yen has lost 21% of its value over the past 12 months. As a result, iPhone prices have risen 25% since then, as trade magazine Bloomberg reported. In fact, almost all electrical appliances, from refrigerators to clothes dryers, have become more expensive, with the exception of game consoles, which have escaped the price pressure.

Consoles are sometimes around $100 cheaper in Japan than in the US.

The reason: neither Sony, nor Microsoft, nor Nintendo want to be the first company to break with the long-established formula “100 yen is equal to one US dollar” – although this ratio no longer corresponds to reality. As of August 25, the price of 100 yen was around $0.7. According to Bloomberg, an OLED Nintendo Switch now costs around $350 (with tax) in the US and only around $290 in Japan. Individuals benefit from these price ratios, because reselling new consoles is worth much more than before. According to Bloomberg, Sony’s PlayStation 5 is available in Japan for around 55,000 yen. You can easily resell them for up to 80,000 yen immediately after buying them.

Analysts: Rising prices won’t really be a problem

As a result, most analysts clearly consider low prices to be over. Because the resale of consoles on the market exacerbates the difficulties that Sony & Co. are already struggling with due to supply chain delays. The latest generation PS5 and Xbox have been in short supply due to the pandemic since they started selling in 2020, and stock has been bought empty. Bloomberg quotes Famitsu Group’s Katsuhiko Hayashi: “More and more gamers are testing PC-like alternatives – when they can’t afford the console they want.” However, at the quarterly report press conference at the end of July this year, Sony’s CFO Hiroki Totoki declined to comment on the possibility of a price increase in the Japanese market. According to Morningstar analyst Kazunori Ito, there is no need to worry about the negative reactions of the Japanese population: “Consumers in Japan are getting used to rising prices. I don’t feel like they would if games were made into consoles. Will be upset. More expensive,” it is quoted by Bloomberg.

Price development remains to be seen

For now, however, Sony, Microsoft, and Nintendo want to stick with the old prices and make up the losses with revenue from other regions. The public does not know if it will stay like this: Sony (-3.2%) and Nintendo share prices fell after the publication of the latest quarterly reports in late July and early August – Sony revised its profit forecast For On the decline in the current fiscal year, Nintendo recorded significantly lower revenues than in the same period last year.

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