Sony, in its latest move, has announced a limited-area regional PS5 Digital Edition for the Japanese market that comes with a literally wild price tag. Around 55,000 yen or about $350 is the price to pay. As a result, a big price decrease compared to other regions has been announced, and this piece of news is making rounds in all media. As part of the State of Play event, this announcement was made, which serves as a clear sign of how strongly and aggressively Sony is trying to assert its presence in the Japanese market at this time.
It is of great significance to note that the PS5 is, in fact, a very old product already and that the price of the device has only slightly fallen in most parts of the world. But in Japan, very few are going to say no to the next-gen console with a budget price tag. A Reddit user drew the analogy that “£272 is what this new price will be in the UK, and added “If only these were the actual prices in these countries, they would be past 100 million sold!” And in fact they are not so far from the truth. The price is essentially offering the user far greater value than the price they are being charged.
Let’s get straight to the point, however, why Japan specifically? There is a huge amount of speculation in the comments as to the factors that make Japan the place to be. Furthermore, some are attributing the impending release of the next-gen Nintendo console as a major reason besides the already mentioned market conditions. “The way I see it, Switch 2 and PS5 are neck and neck in terms of pricing. In case you are a gamer who can afford it, you probably will be tempted to buy the Switch 2 rather than the PS5 in Japan,” was one insightful comment. It’s only logical because Nintendo occupies a very strong position in the Japanese marketplace and so Sony would have to slash their prices by a huge margin to just be able to compete there.
Another point that needs consideration is that of foreign exchange. One of the commenters pointed to the fact that the yen has been weak for a while and said: “It really reflects the economic situation in Japan and the devaluation of the yen. If they were to cut the price of the console, it would be resold at a much higher price.” So it is not a matter of Sony being generous – actual economic factors are making this price possible.
Comparing prices across different regions is one of the most interesting things ever. To quote one very observant person: “The PS5 DE was sold at U$400 at first, then it went up to U$450, and now it is U$500. Tariff alone would not explain a U$150 difference!” And indeed – they are right in pointing – this is a huge difference. Another voice alluded to Sony’s financials suggesting a possibility of up to $200 million in tariff penalties, but still, it does not really clarify the reason behind the preference given to Japan over the other regions.
The price difference between regions is truly astonishing. One unhappy gamer from Europe vented his frustration in the comments saying: “I bet the price in Europe would still be the same, just the console getting a little less powerful and the same price. Europe is the sucker continent for PlayStation, I mean look at how they are selling us a downgraded edition with only 825GB instead of 1TB storage area!” This sounds harsh! The irony is that you really get to see the rational behind the gamers’ displeasure – it feels like Sony is pampering one region with all of its advantages while the others get nothing.
One possibility is that this could be a precursor to a broader price-cutting strategy. An enthusiastic gamer remarked, “Well I think that the rest of the world will probably catch our price cut around Black Friday or right before Christmas.” Wouldn’t that be nice! But with the unpredictability of Sony, it is hard to say. They are very secretive about their strategies.
Moreover, there is a discussion going on whether this is a brand-new product or just an industry practice of creating region-specific locks. One suggestion was that “They might have released the 825GB European model launched last September (the licensing restrictions for Japan have been applied) and launched it.” If this is the case, then it is a pretty smart way of cleaning the old stock without causing a global price variance.
The timing of the price cut is another factor that could be regarded as a sign of how the market is being maneuvered. The imminent threat of the high-powered Switch 2 coupled with the fact that the PS5’s market life is already advanced, Sony has decided to make a stronghold in the Japanese market share. One gamer put it in a nutshell, “Competing with Switch 2” – very much so. But it does take a wise business mind to think it through to the Xbox
