PlayStation 5 recently joined the Meta Quest 2 in the shameful category of “game consoles with arbitrary price hikes”. Earlier this week, Sony announced that it would raise the price of the PS5 across Europe, as well as in parts of Asia and North America.
The price increase isn’t trivial either, with PS5s up as much as 24% in some regions. This is a severe blow, especially at a time when inflation is rampant, and families are already struggling to buy more important goods, such as food and gas.
When Meta raised the price of the Meta Quest 2 by $100 last month, it decried the decision as “pure greed,” and I stick with that statement. While Sony isn’t as absurdly wealthy as Meta, the same reasoning applies here. Sony made about $1.5 billion in net income in the last quarter alone; This is not a company that needs to defend poverty and make consumers pay more for an already expensive product.
To quote Sir Ian Fleming, “Once upon a time an accident. Twice as a coincidence. The third time it’s the work of an enemy.” We’re now in the “chance” stage where game companies are arbitrarily raising hardware prices – and if we get to the “sprint” stage, it’s going to be ugly.
Increasingly expensive hobby
In my article about the Meta Quest 2 price hike, I said that the move was in poor taste for the following reasons:
- Big price increase
- The product is exactly the same as before
- There is no point in making up the new price
- Manufacturer can easily eat up the increased manufacturing cost
- Consoles are supposed to be loss leaders
- Increasing the cost of entry reduces the player base in the long run
If you replace “Meta” with “Sony”, these points will remain. The PS5 shown today is no better than the PS5 from last week. Sony has billions of dollars at its disposal. The PS5 is initially expensive, and raising the price further makes it less accessible to the general public.
In fact, the PS5’s higher price tag can arguably sting much more than Quest 2. Gamers had no reason to expect this kind of behavior from Sony. While the Meta, formerly known as Facebook, has a reputation for being greedy, ruthless, deaf, and arrogant, Sony has done well with PlayStation fans, with quality games, a connected staff, and affordable hardware. Sony has never before increased the price of a PlayStation console without offering something better in return – a redesign, for example, or more powerful hardware.
Even more damning is that Sony’s two biggest gaming rivals, Microsoft and Nintendo, have confirmed they have no plans to follow suit. While the Xbox Series X/S and Nintendo Switch seem to be experiencing similar issues on the supply side, both Microsoft and Nintendo plan to keep their console prices exactly the same, at least for now. Whatever these two companies are planning in the near future, they almost certainly spurred some goodwill among consumers this week.
And when you start at it, the goodwill among consumers is of great importance.
Responsibility towards consumers
To be clear, video game consoles are luxury goods. Diamond necklaces or yachting may not be fun, but it’s not something the average person needs to survive. Even if you argue (correctly) that the average person needs some fun, there are much cheaper ways to play games, especially with the rise of mobile gaming and cloud subscriptions. If the PS5’s high price makes the system too expensive, the negative impact on your life will be relatively limited.
However, none of this excuses Sony’s decision. Sony cites economic challenges as a rationale for raising the price of the PS5. However, it’s important to remember that the average consumer is more likely to want Sony’s economic challenges rather than their own. Sony operates a profitable operation, with a net income in the billions. The company provides goods that people have always wanted, and it has earned enough reputation that it can charge a good deal of money for these goods. Sony employs more than 100,000 workers, many of whom pay enviable salaries.
Compare and contrast with your target PS5 audience, many of them Struggling to afford basic necessities Immediately. During tough times, a little luxury can go a long way. Facebook and Sony are now taking this luxury out of reach.
Remember that video game consoles are not the same as smartphones. There aren’t hundreds of different options, and they don’t all do nearly the same thing. If Samsung is going to raise prices on Galaxy smartphones, you can get another model from Google, Motorola, OnePlus, or (ironically) Sony that works as well. Gamers can still purchase an Xbox Series X, Switch, or gaming PC, but they don’t have access to Sony’s exclusive collection of games or the full PlayStation Plus program.
In short, Sony’s actions, like Facebook’s, may seem harsh towards ordinary consumers, especially those facing financial hardship of their own.
The obvious counterargument here is that Sony Cause of existence Not to please consumers; to gain money. Sony exists to be profitable, especially if it can transfer those profits to its shareholders. Someone somewhere decided that due to manufacturing costs, selling fewer PS5s, at a higher price, is likely to make more money than selling more PS5, at a lower price.
However, I have never found this argument convincing. If you take the line of thinking “businesses exist to make money” at its logical conclusion, every person on earth should do whatever makes the most money in the short term, regardless of their skills, interests, or responsibilities. It doesn’t take it hardcore Kantian To see why such a system would be absurd. People know that making money is just one part of a successful venture; You also have to consider the impact your job has on other people.
For now, Sony’s impact on other people is likely to be very negative. We can only hope that the company will reverse course once its costs come down.
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