The Regional Price Disparity in Consoles: A Global Affordability Concern

The recent launch of a discounted Japan-only version of the PS5 has sparked significant interest, with sales quadrupling in the first week. This move by Sony, following Nintendo's lead, highlights the impact of the Japanese Yen's decline on consumer technology pricing. The reasoning behind these Japan-only editions is clear: to maintain affordability in a crucial market. However, this raises questions about the justification for not applying similar pricing strategies in other regions. The 'razors and razorblades' model, where consoles are sold at a loss to generate revenue through software sales, seems to be re-committed to by Nintendo and Sony in Japan. Yet, the same approach is not seen in other markets, despite the global affordability crisis. One reason may be the instability in component costs, making platform holders cautious about aggressive pricing. Nevertheless, this leaves the reality of expensive consoles, which are not decreasing in price over their lifespan as they once did, but instead, are experiencing price hikes. The role of platform holders in the industry is now under scrutiny, as they seem to have lost their appetite for building and growing the market, instead focusing on their core consumer base. The Japanese market may be the canary in the coalmine, but its trends are replicated globally, suggesting that a similar approach to pricing and market growth could be beneficial worldwide.