Once a few years have passed since a console's launch, they usually drop in price. Sony now chooses to do the opposite and is instead raising the price of PlayStation 5. On the Playstation blog they justify why, explaining that "this price increase is a necessity given the current global economic environment and its impact on SIE's business".
The price increase is £30/€50 and the new recommended retail price is now £389.99/€449.99 for the Digital Edition and £479.99/€549.99 for the standard PlayStation 5 version with Blu-ray player. The price increase applies pretty much worldwide, except for the US, which may seem odd given that it's the biggest market.
Most likely, the exception is due to what Microsoft CEO Satya Nadella said during the last quarterly report, namely that the Xbox Series S/X has "been the market leader in North America for three quarters in a row among next-gen consoles". Raising the price in the most important market while the worst competitor regularly sells more would simply have been a questionable decision.
Piers Harding-Rolls, Ampere's research director for games, believes (via VGC) this will have "minimal impact on sales" of PlayStation 5, but he does not think Microsoft will follow Sony's decision:
"At this stage there is no indication that Microsoft will be increasing its prices for the Xbox Series console. Undoubtedly, Microsoft will take advantage of Sony's increase to push its 'value' message, especially around the Xbox Series S, Game Pass and its All Access offer as we enter the holiday shopping season. As such, this move hands some advantage to Microsoft."
Nintendo has already said that they will not raise the prices.