Sony stock is rising after the company made the controversial decision to raise prices of PlayStation Plus subscriptions, which angered and upset many gamers earlier this week. PlayStation Plus will be more expensive for gamers going forward, but Sony appears to be immediately benefiting from the price increase.
In June 2022, Sony introduced its tiered PlayStation Plus subscription service with the Essential tier starting at $59.99 a year. The Essential tier continues to provide the same benefits that subscribers had with the original PlayStation Plus service. Gamers wanting more games, classic titles from previous PlayStation consoles, and additional benefits may opt for the more expensive Extra and Premium tiers. Unfortunately, gamers will now need to pay roughly 30% more on average for their yearly subscription going forward.
Following the announcement of the PlayStation Plus price increase, Sony stock has risen by roughly 3.4%, according to a recent report by Bloomberg. The price increase is projected to increase Sony’s annual net sales by 100 billion yen, which is approximately $688 million. Sony’s operating profit is also expected to rise by $378 million when accounting for the increased price for yearly subscriptions. According to Sony, the price increase will allow the company to continue providing high-quality titles each month with PS Plus. However, many gamers on social media and online forums believe Sony is simply trying to increase its revenue since PS Plus is necessary for online play in most titles.
Although Sony already appears to be benefiting from the controversial PS Plus price increase, some analysts warn that the rising stock and revenue will only last for the short term. For example, the price increase may cause gamers to consider canceling their subscription or move down to the Essential tier. Bloomberg also spoke with CLSA analyst Amit Garg, who believes that the price increase may cause a series of price hikes from Sony, Microsoft, and other subscription service providers in the future. However, the long term effect that the PS Plus price increase will have on a competing service such as Microsoft’s Xbox Game Pass remains to be seen.
Sony’s rising stock greatly benefits shareholders in the short term, but gamers may be contemplating about their PS Plus subscriptions, which could potentially lead to decreased revenue in the long term. Some players are also upset with Sony’s free PS Plus games for September 2023, which includes the poorly-received Saints Row reboot from the now defunct Volition. The situation regarding PS Plus paints Sony in a bad light, and rebuilding good will may require the introduction of new benefits.
At the very least, PS Plus will continue to offer new game additions across all three tiers every month. First-party day one releases with PS Plus could remedy the frustrations that players have with the price increase, but the decision is ultimately left up to Sony. Currently, PS Plus does not appear to be on track to adopt the day one release benefit that Xbox Game Pass employs.
