No price increases for game consoles planned in Japan despite high inflation rate

The yen has lost 21 percent of its value over the past 12 months. Accordingly, the prices for iPhones have risen by 25 percent since then, as reported by the business magazine Bloomberg. In fact, almost all electrical appliances, from refrigerators to tumble dryers, have become more expensive – except for game consoles, which seem to have been spared the pressure on prices.

Consoles are sometimes around 100 US dollars cheaper in Japan than in the USA

The reason for this: Neither Sony nor Microsoft nor Nintendo want to be the first company to break with the long-established formula “100 yen equals one US dollar” – although this ratio no longer corresponds to reality. As of August 25, 100 yen is worth around $0.7. According to Bloomberg, a Nintendo Switch OLED now costs around 350 US dollars (plus taxes) in the USA and only around 290 US dollars in Japan. Private individuals take advantage of these price ratios, because reselling new consoles is now much more worthwhile than before. Sony’s PlayStation 5 is available in Japan for around 55,000 yen, according to Bloomberg. You can easily resell them for as much as 80,000 yen right after you buy them.

Analysts: Price increases would not actually be a problem

Accordingly, most analysts apparently consider the low prices to be outdated. Because the reselling of the consoles on the market exacerbates the difficulties that Sony & Co. are already struggling with due to delays in the supply chain. The PS5 and the latest generation of the Xbox have been in short supply due to the pandemic since the start of sales in 2020, and stocks have been bought empty. Bloomberg quotes Famitsu Group’s Katsuhiko Hayashi: “More and more gamers are testing alternatives – like PCs – when they can’t buy the console they want.” Nevertheless, at the press conference on the quarterly report at the end of July this year, Sony CFO Hiroki Totoki declined to comment on the possibility of a price increase on the Japanese market. According to Morningstar analyst Kazunori Ito, there is no need to worry about a negative reaction from the Japanese population: “Consumers in Japan are getting used to the price increases. I don’t have the impression that they would be upset if game consoles became more expensive,” he is quoted by Bloomberg.

Price developments remain to be seen

For now, however, Sony, Microsoft and Nintendo appear to want to stick with old prices and offset losses with revenue from other regions. The public does not know whether it will stay that way: The share prices of Sony (-3.2 percent) and Nintendo fell after the publication of the last quarterly reports at the end of July and beginning of August – Sony had revised its profit forecast for the current financial year downwards, Nintendo reported significantly lower revenue compared to the same period last year.

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