In case you missed it, Sony recently announced price hikes for the PlayStation 5 in select regions, including in the European and UK markets, where the cheaper digital model saw a steep £40/€50 rise. This would be a tricky business move in typical gaming times, but there’s a bright red hat-wearing elephant in the room that makes this go from unfortunate to downright baffling.
The Nintendo Switch 2 was recently revealed in all its glory, and it’s a force to be reckoned with. Pre-orders went live in Europe over the last few weeks, and the timing of Sony’s increase in prices to its system may actually be paving the way for an even more successful launch of Nintendo’s next system. Whilst we believe there might be a broader method to Sony’s madness, this is still an incredible risk that we also think gives Nintendo a clear shot at European domination with the Switch 2.
Sony VS Nintendo – The new console war
Let’s begin by explaining the new face of gaming. Historically, and perhaps still for those who don’t follow gaming news, the ‘console war’ rivalry in the industry has long been viewed as PlayStation VS Xbox. They release similar consoles at similar times, and both have loyal fanbases with similar juxtaposing exclusives – or at least, they used to. Microsoft has almost self-admittedly withdrawn from the console race, with the Xbox Series X performing far below the PlayStation 5, and the Xbox One also severely falling short behind the generation-defining PlayStation 4. Games that used to be Xbox exclusives are now being sold, or are in the process of shifting to, PlayStation systems. Xbox wants to be a gaming brand much more than it wants to be a platform holder, and that’s good news for Sony. That is, however, until a certain other Japanese console maker decided to switch up the gaming landscape and challenge Sony’s impending domination over the gaming market.
The Nintendo Switch released in 2017, roughly halfway through the life of the PS4, with sales exploding in 2020 and 2021, coinciding with the launch of the PS5. Since then, the Switch has become the second best-selling home console of all time, and currently third overall. It’s highly likely the Switch will make it to second place, leapfrogging past the Nintendo DS within the next year or two. The Switch has also outsold Sony’s PS4 despite its four year head start. Whilst Xbox’s fierce rivalry with PlayStation may have subsided, gamers around the world suddenly had a new gaming ecosystem with their Nintendo Switch, and Sony found itself with a new rival.
Affordable entry to the current generation and beyond
So here we are, with Nintendo and PlayStation being the two major players in the global gaming hardware scene. Nintendo is preparing to release its Switch 2, again releasing a few years after Sony’s console. This time however, Nintendo isn’t coming into the competition stumbling after the failure of the Wii U – they’re soaring in on a warp star in the form of what’s soon to be the most successful video game console of all time. The Switch 2 is bigger and better in almost every way than the Switch, with the only potential sticking point for consumers being the price.
The Switch 2 will launch at £395 in the United Kingdom or €470 in most of mainland Europe, which on the surface is far higher than the £280/€330 Switch launch in 2017. Adjusted for inflation and technology developments though, this leap isn’t as high as it may appear. However, the Switch 2 was still launching at a higher price point than the PS5’s cheapest entry level with the digital edition PS5 console priced at £390/€450. The PS5 is on the surface the more brute-force ‘powerful’ of the systems, so the portability of the Switch may have only come at a minor additional expense but in a time of economic struggle across the UK and Europe, the PS5 was still objectively the cheaper option. Or rather, it was.
In response to the global economic situation following President Trump’s tariff fiasco, Sony announced price hikes to their PS5, but not in the United States. These hikes aimed to increase the cost of entry into the PS5 ecosystem in Europe, with the cheapest digital PS5 now costing £430/€500. This has had the unfortunate (for Sony) effect of making the Nintendo Switch 2 not only the newest shiniest offering on the gaming market, but also cheaper than the five year old PS5 that Sony is still pushing.
As such, whilst it may not be the most outright powerful platform on the market, the Switch 2 still offers power and portability, and has the added leverage and marketing power of being the most affordable and hyped system on the market in Europe right now. For what it’s worth, it’s also cheaper than the Xbox Series X, but not the Series S. However, Xbox’s weakening market presence in Europe including actual stock disappearances suggest that it likely won’t have much impact on anyone’s purchasing choices. This is very much a two-horse race, and Sony’s price hike has added an additional hurdle to itself.
A spooked Sony responds to a Nintendo swing
Following the grand reveal of the Switch 2, Sony actually sent out surveys to select PlayStation gamers looking specifically for feedback on how they feel about Nintendo’s latest console offering. It’s rare to see them respond so directly to a gaming announcement, but the Switch 2 is already projected by analysts to be the biggest gaming console launch of all time, so we can’t say we’re surprised.
The survey specifically asked about how PlayStation gamers felt about the price of the Switch 2. Whilst we don’t have access to that data, we imagine results were mixed based on the feedback we’ve seen online. It may just be a loud minority, but many were unhappy with the price of the Switch 2 after its reveal. Despite this however, the PS5 price hike now does make the Switch 2 still the cheapest option on the market for the millions of potential customers throughout Europe.
It’s not just pricing that Nintendo has over Sony in the European markets now, but also its global reputation for its exclusives. Sony has spent the last few years shifting to a slightly more broad approach to its releases, such as making many PC ports of its first-party lineup, or even purchasing cross-platform juggernauts like Destiny 2 whilst still having them readily available on the Xbox. Nintendo on the other hand used first-party exclusives to push its Switch 2 heavily during its full reveal presentation. Whilst many third-party developers were still used to showcase its power and range of games, Nintendo is best known not only for their consoles, but their games.
As both Microsoft and Sony are broadening their markets, Nintendo’s is as restricted as ever, and remains the cheapest option. It’s no surprise that Sony wants to know how PlayStation fans feel about the Switch 2’s first-party packed announcement, and perhaps now with the impact of their price hike they might just have a reason to be spooked.
Sony’s strategy sees Europe pay whilst America dodges
Perhaps the last thing to address here is the biggest question of all – why? Sony raised the price of the PS5 in Europe after Switch 2 pre-orders began, so they knew they were pricing themselves out when they made the decision. We think we know the answer, and it sees the return of an unlikely motivator: Xbox. Whilst Sony’s decision to increase prices is related to the global economic uncertainty coming from the impact of American-made tariffs, an increase to prices in America could potentially reopen that formerly fierce console war between Xbox and PlayStation once again. Microsoft is an American company, so seeing their Japanese former rival Sony raising their prices could’ve resulted in Xbox gaining ground in what remains its strongest market. Whilst Xbox is nowhere near as big as PlayStation or Nintendo, it’s by far at its most popular in its home nation of the United States.
Historically, Sony has ruled Europe and outsold Microsoft at every turn. It’s a different and more competitive story in the United States though. As such, Sony perhaps feel they can afford to give Nintendo and Xbox ground in Europe given their domination, especially if it prevents Microsoft from being able to make a move on them in the United States. Sony is playing a game of chess with the PS5, but it’s facing two opponents at once. A move against Microsoft may look like a move in favor of Nintendo, but perhaps from a business standpoint that’s a risk worth taking, especially considering the alternative approach and the path it could lead to in reigniting the PlayStation-Xbox competition.
Despite this though, to the average European customer it still looks like Sony is picking favorites. Their move to raise European prices and not American ones makes it seem like their American audience matters more, and the European customer can pay the bills to prevent them giving Microsoft any additional ground in the United States. Optics matter, and right now the facts are that Nintendo are offering a newer, cheaper system, whilst the PS5 is older, and increasing in price despite the continent being so far from the epicenter of economic shocks that is the United States at present.
This article has heavily focused on European market and its relation to Sony, but the PlayStation brand is seeing price hikes beyond the continent. Both the digital and disk drive editions of the PS5 saw price hikes in Australia and New Zealand, as well as some Middle Eastern and African countries. Additionally, the PlayStation Plus subscription service price is rising in over 20 countries including Canada – but not the United States. Sony is asking the world to pay more, but doing all it can to avoid asking it of the United States, despite it arguably being the biggest influence in current global economic instability.
This is a pivotal time for smart business moves from Sony, and they clearly have a priority when it comes to the PlayStation brand, which is to protect its American audience in the United States. With this though, the Switch 2 has been made the cheapest entry point to new generation gaming across other entire continents, and a rising global audience for Nintendo only makes it stronger in what seems to be the new face of the console wars. Sony has its goals to maintain its strengths, but Nintendo has an opening to shoot higher than ever before.
Do you agree with our analysis of Sony and Nintendo’s business strategy as they position the PS5 and Nintendo Switch 2 against each other on the market? Will you be picking up a Switch 2? Let us know all your thoughts in the comments below, and keep your eyes on GameLuster for more breaking gaming news, in-depth industry analysis and Nintendo Switch 2 coverage.
