Sony's decision to increase the PlayStation 5's price in Japan highlights the country's reduced significance for the company | Opinion
In 2016, during the height of the PS4's commercial success, Sony restructured its gaming divisions. This move unified all PlayStation-related operations into one management, including services like PlayStation Plus, which had previously been handled by separated units such as "Sony Network Entertainment." This consolidation led to a new entity, Sony Interactive Entertainment headquartered in California's Bay Area instead of Tokyo.
This shift was symbolic of PlayStation as a global entity with a strong presence in California's tech landscape but didn't result in significant operational changes. However, to many PlayStation fans, especially in Japan, it marked a cultural transition, acknowledging their lower market priority despite longstanding leadership in consumer base rankings.
It's fair to say that the strategic considerations might have been different if Japan was actually a really important market for Sony
Recently, Sony announced a price increase for the PS5 console and accessories in Japan, effective September 2nd. The disc drive model will see a ¥13,000 increase, setting the new price at ¥79,980 (about $550). This decision, motivated by the Japanese Yen's weakened value against the US dollar, has led to disappointed customer reactions, though it's perceived as an unsurprising development given past economic and strategic considerations.
This price adjustment reflects broader economic trends rather than the actual market economy, primarily influenced by central bank policies and inflation rates. Although Sony argues this adjustment aligns closely with US pricing due to currency shifts, it's acknowledged that Japan is no longer a pivotal market for Sony.
Contrary to typical expectations, Japan has become a territory dominated by Nintendo, solidifying itself as primarily a handheld market. Handheld gaming devices succeed there due to cultural factors like commuting and living space limitations, elements Sony recognized and attempted to address with devices like the PSP and PS Vita, though these only achieved moderate success outside Japan.
Japan is handheld territory, and right now, Nintendo is the only company with a serious handheld device in the market
The PS Portal, for example, may be an attempt to reclaim market space in Japan, which remains a tough region for home consoles. Contrary to overseas markets, where it's overlooked, the device has seen high demand domestically due to these unique market dynamics.
Nonetheless, Sony is performing relatively well in Japan, with around 2.6 million PS5 units sold in 2023, marking the company's best performance since the PS2. Despite this, the market remains stagnant, highlighted by the Switch's significantly better sales figures.
To resolve currency-related price disparities without expanding the Japanese market remains Sony’s strategy. Comparatively, Nintendo might be delaying the Switch 2 to avoid launching under unfavorable economic conditions that could impact affordability within Japan, where they hold a larger market share.
Following the price hike, Japanese consumers rushed to purchase second-hand PS5 units, driven by pragmatic considerations rather than zeal. The attach rate for PlayStation in Japan is lower, with many consumers preferring free-to-play games such as Apex Legends and Genshin Impact rather than a strong attachment to the console itself.
Future releases unlikely to significant shift the PS5 market in Japan. Titles such as Monster Hunter have potential but aren't guarantee major gains compared to Nintendo Switch, portraying the console market waiting for the next big breakthrough—likely with the advent of the Switch 2.
The harsh reality remains that in Sony's home territory, the market is waiting for Switch 2; nothing before that is likely to really change the face of the console competition in this region
