All the way back in 2016, when the PS4 was a massive sales success, Sony made a fairly major organizational shakeup in its gaming-related industries.
Operationally, the biggest change was the unification of everything PlayStation-related under one roof – until then there was a separate business unit called “Sony Network Entertainment” that ran services like PlayStation Plus, as well as Sony's powerful and unusually autonomous regional units. Computer Entertainment, which were all merged into a single new management structure.
But the most eye-catching aspect of the change was where the new management structure, Sony Interactive Entertainment, was to be based – not in Tokyo, but in California's Bay Area.
The shift wasn't really all that meaningful — it was a recognition of PlayStation's current reality as a major international business with studios around the world and deep ties to California's tech and entertainment industries, not a coup or power grab.
In reality, not much had changed, as PlayStation now had a home address in San Mateo rather than Shinagawa. Still, it definitely felt like a cultural shift to many fans of the platform — and for those fans in Japan, it was something of a bitter pill to swallow. It wasn't unexpected by any means – Japanese gamers have long lamented that their days of being “first among equals” in PlayStation's global consumer base are long gone – but it's still a bit hard to swallow.
It's fair to say that the strategic considerations might be different if Japan were a truly important market for Sony
There's probably a bit of that bitter taste in a few mouths in Japan this week, with Sony announcing that it's raising the price of all PS5 hardware – not just the console, but also the PSVR2 controllers and headsets – by quite a significant amount. sum. The PS5 itself goes from ¥13,000 (about $90 / €80) to ¥79,980 (roughly $550 / €500) for the disc drive model. The new prices will take effect on September 2.
Unsurprisingly, there's nowhere to actually sell stock at the old prices right now, with plenty of people on social media posting grim pictures of out-of-stock signs from electronics retailers harkening back to the limited console's early days. . Quite a few of these images are accompanied by laments about Japan's economic woes, Sony's lack of respect for the Japanese market, or both – but as before, it doesn't surprise anyone, only disappoints.
Quite a few unhappy consumers are also seemingly bracing themselves for more sticker shock when PS5 Pro details and pricing are likely to be announced in the coming months.
It should be noted that Sony's rationale for raising prices is entirely economically sound (which, like “technically correct”, is one of the worst kinds of sound). Various macroeconomic trends have conspired to reduce the value of the Japanese yen to its lowest ebb against the US dollar since the 1980s; most of them have less to do with the “real” economy, as it were, and more to do with the machinations of central bank interest rates and inflation-related policies.
Things will probably return to the mean over time, at least a little. But for now, the Yen is cheap, which is why products like the PS5 were effectively sold at a deep discount in Japan. Sony has overcorrected this a bit, but due to recent currency fluctuations, the new prices are roughly in the same range as US hardware prices.
That's fine as an economic argument – but I think it's fair to say that the strategic considerations might be a bit different if Japan were a really important market for Sony. It's not always intuitive to people overseas – in fact, it borders on sounding crazy to some people – but in reality, not only is Japan not a particularly important market for PlayStation; it's also not a market where PlayStation would do particularly well.
You can understand why this is counterintuitive, of course. Sony is still a Japanese company, after all, even if it has moved PlayStation headquarters across the Pacific. And we all know what a disastrous failure Xbox is in this territory (a reputation that is no exaggeration), so surely PlayStation must rule? Even if Japan isn't a commercially super important territory for Sony, does PlayStation have to be a culturally important platform for Japan?
However, the reality is very different – because Japan is Nintendo territory through and through. In fact, it's probably the only territory where every other platform holder plays a distant second fiddle to Nintendo, although it also comes pretty close in some European countries.
However, Nintendo's dominance in Japan in recent years is not based solely on the strength of its IPs, although they are certainly very popular there. Japan isn't just Nintendo territory; Japan is handheld territory, and right now Nintendo is the only company with a serious handheld on the market.
The writing has been on the wall in this regard for some time. There are various theories as to why handheld gaming is so important to the Japanese market – the importance of gaming away from home in a country with long train journeys, small apartments and so on is definitely part of it, but it's definitely true that young consumers are less likely to that they will have a television at all, which is why it is difficult to sell them a console without a display. These are long-term factors, although as time went on they became more and more influential and Sony was unaware of them.
It could be argued that Sony's persistence in pushing its handheld endeavors – the PSP and PS Vita – came in large part from trying to stay relevant in its home territory, even if those platforms haven't really taken off anywhere else.
At least it did on the PSP for a while, with Monster Hunter in particular being an absolutely massive hit on the PSP here. (The strange, if not unwelcome, situation Capcom finds itself in with the franchise is probably Sony's problem in microcosm – while in Japan Monster Hunter is seen as essentially a handheld game and therefore has to be on the Switch, it's been a huge success overseas . as a home console game on the PlayStation, leaving the company with no choice but to bounce between two successful iterations of the franchise.)
Japan is handheld territory, and right now Nintendo is the only company with a serious handheld on the market
You could even argue that PS Portal, a strange thin-client pocket device that has no real parallels anywhere else in the world of gaming hardware, exists largely as an attempt to regain some of that relevance in Japan – it doesn't work in an out-of-home context. but perhaps it reflects a feeling that PlayStation's reliance on the big TV as the center of its experience is cutting it off from a potential market in Japan.
This hypothesis may be correct; PS Portal seems to be barely talked about overseas, but in Japan it has been back-ordered at most retailers since launch and is a current favorite among price scalpers.
None of this is to say that Sony is doing particularly badly in Japan, by the way. Around 2.6 million PS5s were sold in 2023, its best sales year since the PS2 era. Relatively speaking, it's doing well in Japan right now – that just basically means the market here hasn't grown in decades and is an ever-shrinking slice of a growing global pie.
By comparison, the Switch sold 4 million units in the same period – despite being much deeper at the end of its life. Sony's second place in Japan isn't even close, and one can't imagine slapping an extra chunk of coin on the price of the hardware will help.
So yes, the currency markets probably give Sony little choice – but that's only because we recognize that growing and building the Japanese market is not a top priority for the company.
There were other ways. For example, it's entirely possible that one of the reasons the Switch 2 has been so significantly delayed is that Nintendo isn't happy launching the new platform in economic conditions that could keep it out of the reach of Japanese consumers, who make up a dramatically larger chunk of its global pies than Sony.
Talking about strong or weak currencies is all well and good, but the weakening yen has done nothing to translate into wage inflation in Japan, so the PS5s really just jumped massively in terms of purchase price parity. Of course, Sony will also be aware that a really big price difference risks creating a gray market for cheap Japanese hardware in other countries, thus exacerbating stock shortages in Japan.
Put in those terms, it's a no-win situation – Japanese players can face either higher prices or massive supply chain problems. Sony unsurprisingly chose the option that generates more money.
The harsh reality remains that in Sony's home territory, the market is waiting for the Switch 2; nothing before that is likely to really change the face of console competition in the region
Even in response to the price hike from consumers — disappointed social media posts and all — you can see the root of the bigger problem. The thunder of discontent is subdued; Consumers in Japan seem pretty ambivalent about the PS5 overall.
After the price hike was announced, second-hand PS5 hardware came into play – most of the comments about hunting down thrift stores or online sales sites seemed to come from people who still play PS4 and feel like it was a good time. like everyone to upgrade rather than being pushed by some particular enthusiasm.
It's also telling to look at what people are talking about playing on PS4 and wanting to continue playing on PS5 – mostly free-to-play titles like Apex Legends, Genshin Impact and Overwatch, which is in line with the observation that PlayStation's connection rate it's also lower in Japan than most other countries, with the main audience here being people using it as a F2P box.
There's not much on the horizon here either that's likely to set a match for PS5 sales. Unlike most territories, Japan is unlikely to see much of a boost with the launch of GTA 6 next year either; of course it will work fine but it won't move consoles like it does in other countries.
The next Monster Hunter title is arguably the biggest game on the horizon that will likely push PS5 units, but many fans of the series in Japan prefer the Switch iterations. The harsh reality remains that in Sony's home territory, the market is waiting for the Switch 2; nothing before that is likely to really change the face of console competition in the region.