It came as a surprise to many observers out there, but electronics and entertainment giant Sony (SONY) hiked its prices on the PlayStation 5. However, it only made this hike in Japan, which was an odd twist, to say the least. Nevertheless, Sony shares were up over 3.5% in Tuesday afternoon’s trading.
Starting September 2, Sony will raise the price of a PlayStation 5 in Japan to 79,980 yen, which is a little over $555. That may seem odd; why suddenly hike the price on a four-year-old gaming console, especially given that those who want one likely already do, and those who might have considered buying one will now be less apt to do so?
The biggest reasons Sony cited are a “challenging external environment,” as well as issues in the global economy. Again, one would think that this would be the cause to cut prices to draw more buyers, not to raise prices. However, some also point out that a hardware refresh is likely on the way, and perhaps Sony wants to dissuade people from buying the old console so they can instead purchase the improved version.
Concord Calamity
Meanwhile, Sony rolled out a major new gaming project that proved to be less of a hit than it had hoped for. Concord, a live service shooter, rolled out on August 23 and has been on a downhill run ever since. Reports noted that its current peak player count—a measure of everyone who is actually playing the game—dropped to 697 on Steam.
By way of comparison, fellow live service shooter Suicide Squad: Kill the Justice League rolled out a peak number of 12,786, which was regarded as a significant disappointment. Perhaps an even greater sting came as folks realized Concord had been in development for eight years and cost tens—if not hundreds—of millions of dollars.
Is Sony a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SONY stock based on two Buys assigned in the past three months, as indicated by the graphic below. After a 16.99% rally in its share price over the past year, the average SONY price target of $108 per share implies 12.43% upside potential.
