PS5: Sony warns of price hike that could make console eye-wateringly expensive

Sony's PlayStation 5 console is launching next year and is already up for pre-order at at certain retailers, and while the very expensive price tag currently hanging off it is most likely a placeholder, it could still be more expensive than we'd all like.

That's because with the US and China in the throes of a trade-war, the threat of further tariffs on Chinese exports threatens console manufacturers, and they have to decide if they want to move production or take the hit and pass the cost onto their consumers.

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Last month, the trio of leading console-manufactures - Sony, Nintendo, and Microsoft - issued a statement in response to increasing tariffs, pointing out that it would have a negative effect on not only their businesses, but the American video games market and its consumers. 

The letter calls the industry a "core part of the fabric of American entertainment culture" and stresses that a tariff surge of 25% would tear that fabric, putting the price of consoles out of reach for the typical American family.

The tariff hike would result in $840 million (£692.5 million) foisted onto consumers and, subsequently, a net loss of $350 million (£288.5 million) for the US economy every year for as long as the new tariff remains in effect.

If that didn't sounds dire enough, it continues on to describe a "rippled effect of harm" to US-based developers of accessories and games that "could be dramatic," including the loss of "thousands of high-value, rewarding  U.S. jobs at risk."

According to the WSJ neither Sony nor Microsoft are making the move to relocate the manufacturing of their consoles outside of China, like Nintendo has begun to do, and while a Sony executive has reminded everyone that a solution to dealing with continued tariffs hasn't been hashed out yet, passing on the increased production costs to the customer isn't out of the question.

At the moment, the PS5 has a placeholder price of 9999 Swedish Krona over on MediaMarkt Sweden which equates to around $1,047 (£859.73). Even if that's subject to change, it'll struggle with a price anywhere near the PS3, which had a rocky launch thanks to its hefty $599 price tag. 

We've doubted Sony would be able to comfortably sell the PlayStation 5 for under $500 with all of that power beneath the hood, and that was before the news of expanded tariffs. If that cost is passed onto its customer base, it could herald another disastrous console launch to mar the next generation, so it'll have to make its mind up soon.

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Via: The Verge

Source: WSJ