Sony Shares Climb As PlayStation 5 Price Hike In Japan Sparks Investor Optimism

Shares of Sony Corp. (SONY) rose over 3% on Tuesday, following a strong finish on the Tokyo Stock Exchange, as the company announced a significant price increase for its PlayStation 5 (PS5) console in Japan.

The tech giant raised the suggested retail price to 79,980 yen ($553), a 20% increase, effective Sept. 2.

Sony attributed the price hike to a challenging external environment, including fluctuations in the global economy.

This reportedly marks the third time the company has raised the PS5's price since its 2020 launch.

The PS5, which saw intense demand during the COVID-19 pandemic, is expected to sell 18 million units globally this financial year, down from 20.8 million the previous year.

The price increase aligns with a broader trend in the gaming industry, as Microsoft also announced price hikes for its Xbox consoles in Japan earlier this month, citing changing market conditions.

The yen's depreciation has significantly impacted local prices, with 100 yen now equivalent to just $0.69, compared to $1 when the PS5 hit the market in November 2020.

On Stocktwits, retail sentiment for SONY surged to ‘bullish’ levels from ‘bearish’ zone a day ago, with message volume hitting the 'extremely high' mark as investors reacted positively to the price hike, seeing it as a move that could improve margins and boost profitability.

Investors are also eagerly anticipating a potential "Pro" version of the PS5, which analysts expect to be announced later this year.

Sony’s U.S. shares have gained about 2.5% so far this year, underperforming the broader S&P 500 and Nasdaq indexes.

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