Sony, one of the world’s most recognized names in consumer electronics, is facing a dilemma on how to maintain its grip on the global gaming market amid rising geopolitical tensions and economic pressures. With Donald Trump’s newly imposed tariffs on Chinese imports made to cost the company nearly $680 million this fiscal year, Sony may be left with two unpalatable options raising prices on its flagship PlayStation 5 console or moving parts of its manufacturing to the United States.
Neither choice is simple, and both underscore the growing complexity of doing business in a world shaped by political decisions far removed from the boardroom.
During a recent earnings call, Sony’s Chief Financial Officer Lin Tao didn’t sugarcoat the challenge. Tariffs, he confirmed, would significantly impact Sony’s bottom line. The company is projecting an extra ¥100 billion in costs roughly $680 million thanks to the U.S. trade penalties levied on Chinese-made goods.
The PlayStation 5, which continues to be primarily manufactured in China, sits directly in the crosshairs of these tariffs. Though there’s a temporary 90-day pause and some rate reductions, the 30 percent import tax from China still dramatically overshadows the 10 percent rate from other nations. And, critically, gaming consoles have not been granted an exemption.
To put that into perspective: every PS5 that ships from China into the U.S. could carry with it hundreds of dollars in extra cost. Multiply that by millions of units, and you get a logistical and financial nightmare that even a giant like Sony can’t ignore.
Pass It On—To the Consumer?
While Tao stopped short of directly naming the PS5, he made it clear that the company is weighing the option of “passing on” the cost of tariffs to consumers. That means higher retail prices, which could see the already pricey console become even more expensive in the U.S., a move that could rattle customers and disrupt sales momentum.
Sony has already increased PS5 prices in several international markets, including the UK, Australia, and much of Europe. The United States, until now, has been spared. But that could soon change.
With Microsoft already hiking the price of its Xbox Series consoles by as much as $100, and Nintendo reportedly holding firm on Switch 2 pricing for now, the pressure is mounting on Sony to decide whether to absorb the cost or shift it to gamers.
Domestic Manufacturing: A New Frontier?
If raising prices isn’t the path Sony chooses, it may pivot toward a longer-term strategy: moving at least part of its PlayStation manufacturing to the United States. On the same call, CEO Hiroki Totoki acknowledged that “the console can be produced locally” and that doing so “would be an efficient strategy” in light of the current trade environment.
Over the years, many multinational companies have localized production to skirt tariffs or decrease dependency on specific regions. But for Sony, it would be a important operational shift. Setting up PS5 production stateside would require big investments in infrastructure, labor, and logistics.
Still, Totoki’s comments suggest the company is genuinely considering it, if not outright preparing for it.
All of this comes as Sony navigates a slightly softening demand for the PS5. The company shipped 18.5 million units over the past fiscal year down from 20.8 million the year before. The total lifetime shipments now stand at 77.7 million, still impressive by any metric, but growth appears to be slowing.
At the same time, Sony’s broader electronics business is being squeezed. Tariffs are just one piece of a larger puzzle that includes supply chain disruptions, rising raw material costs, and heightened competition in virtually every segment from headphones to TVs to cloud gaming.
The upcoming launch of Sony’s WH-1000XM6 headphones, the successor to its best-selling $399 XM5s, may offer some early signals about the company’s pricing posture going forward.
A price rise on the PS5 doesn’t just affect Sony’s balance sheet, it influences millions of consumers. For many families, especially in the U.S., the PS5 is more than just a console. It’s a connection to friends, a centerpiece for entertainment, and often a child’s most anticipated gift.
Likewise, shifting production to the U.S. would mean jobs, training programs, and a new chapter in Sony’s American presence but it would also challenge workers in China whose livelihoods depend on PlayStation assembly lines.
Sony now stands at a crossroads: increase prices and risk alienating customers, or make a costly but potentially future-proof investment in American manufacturing. Either way, the next few months could redefine the way PlayStation is built, sold, and experienced around the world.
