PlayStation Plus price increases push Sony shares higher

Sony Group Corp. experienced its most significant surge in over a month after announcing a substantial increase in the pricing of its PlayStation Plus subscription service, a core element of its gaming division. This move has the potential to bolster the company’s financial performance.

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The renowned gaming and entertainment conglomerate has decided to raise the annual fee for the premium tier of its highly popular service, which is essential for multiplayer gaming and grants access to free downloads. The new pricing structure will see consumers paying as much as $159.99.

This decision comes shortly after its primary competitor, Microsoft Corp., implemented a similar fee hike for its Xbox Game Pass service earlier in the summer.

In response to this announcement, Sony’s shares experienced a notable increase of up to 3.4% in Tokyo on Friday.

Both Sony and Microsoft are banking on the continued willingness of gamers to invest in premium content and services, even amid economic uncertainties. From the United States to China, consumers have demonstrated a proclivity for spending on services and experiences, even when economizing on major purchases.

Analysts, such as CLSA’s Amit Garg, speculate that this price adjustment from Sony might herald a series of periodic increases in the future. This latest substantial increase could potentially contribute a net ¥100 billion (equivalent to $688 million) in annual sales and ¥55 billion in operating profit.

However, Garg also cautioned that the prevailing weak macroeconomic conditions might have repercussions on gamer spending habits.

Sony’s recent financial outlook fell short of expectations, with the company citing delays in recovering from a global smartphone downturn as a contributing factor. Additionally, the April-June quarter saw weaker-than-expected sales for its flagship PlayStation 5, raising concerns that the company may need to allocate more resources to marketing efforts in order to achieve its goal of selling 25 million units in the current fiscal year.