Sony has made strategic shifts in its PlayStation 5 (PS5) supply chain to mitigate the impact of US tariffs, according to statements from CFO Hiroki Totoki during the company's fiscal 2025 first-quarter earnings call.
Production exodus gains momentum
According to WccfTech and Twisted Voxel, Totoki revealed that all PS5 hardware sold in the US market is now produced outside China, reflecting Sony's effort to diversify manufacturing locations and avoid additional tariff costs. The relocation aims to shield the company from ongoing trade tensions that have affected many tech manufacturers reliant on Chinese production. Peripheral accessories are also in transition, with full relocation expected by the end of the first half of fiscal 2025 (September 2025).
Pricing flexibility remains on the table
While Sony has so far avoided raising PS5 prices in the US, Totoki noted that pricing remains flexible due to multiple factors, including profit targets, product lifecycle value, shipment volumes, game content sales, and consumer sensitivity. Earlier in 2024, PS5 prices increased in Europe, the UK, and Australia amid inflationary pressures and rising costs, signaling that US price hikes cannot be ruled out.
Gaming division delivers record performance
Despite these challenges, Sony's gaming division reported record quarterly results. Revenue rose 8.3% year-over-year to JPY936.5 billion (US$6.37 billion), with operating income soaring 126.8% to JPY147.9 billion, marking a historic high. PS5 sales reached 2.5 million units, up 100,000 units from the previous year, while game software sales jumped by 12.3 million copies to 65.9 million.
Sony is also preparing for the next generation with PlayStation 6 development focused on delivering high-performance 4K gaming at 120 frames per second while controlling costs — a move likely influenced by current economic and tariff-driven market realities.
Article edited by Jerry Chen
