Sony Group Corp. rose its most in more than a month after hiking the price of its core gaming PlayStation Plus subscription service by roughly a third, potentially shoring up its bottom line.
The gaming and entertainment giant will now charge as much as $159.99 annually for the premium tier of the popular service, required for multiplayer gaming as well as free downloads. That follows main rival Microsoft Corp., which hiked fees for the similar Xbox Game Pass service over the summer. Sony’s shares gained as much as 3.4% in Tokyo on Friday.
Sony and Microsoft are betting that gamers will continue to pay for premium content and services even as they tighten their belts during an economic downturn. Consumers from the US to China have shown a willingness to spend on services and experiences even while cutting back on big-ticket items.
Sony’s move could herald a series of regular price hikes, CLSA analyst Amit Garg said. This week’s “steep” increase could add a net ¥100 billion ($688 million) of sales and ¥55 billion of operating profit annually. He warned however that there may be fallout for gamer spending given the weak macroeconomic conditions.
The Japanese company last month delivered a financial outlook that missed expectations, citing delays in exiting a global smartphone slump. It also reported weaker-than-expected sales for its flagship PlayStation 5 during the April-June quarter, igniting concern the company will need to spend more on marketing to achieve its goal of selling 25 million units this fiscal year.
Read more: Sony Falls Most in a Year on Warning Over Smartphone Demand
--With assistance from Kurt Schussler.
