It has announced that U.S. import tariffs are set to cut its operating profit by around 100 billion yen (some $680 million) in the business year ending around March 2026. The enormous drag has led the company to consider a range of options for offsetting the financial hit, such as raising the price of the PlayStation 5 (PS5) in the United States and shifting some of its production activities to the United States.

Tariffs Endanger Profit Growth

Albeit reporting a record net profit of 1.14 trillion yen ($7.7 billion) in the fiscal year that ended in March 2025, Sony is predicting a stagnant operating profit of 1.28 trillion yen ($8.7 billion) for the current fiscal year. The expectation is for the 100 billion yen U.S. tariff loss as part of the current trade tensions.

Possible PS5 price hikes and U.S. production

As a response to the tariff effect, Sony is looking into price increases for the PS5 in the U.S. market. Sony already hiked prices in Britain and the European marketplace due to inflation as well as exchange rate volatility. Moreover, Sony is considering the viability of relocating part of the PS5 production operations to the United States in an effort to avoid the tariffs that charge 30% import tax on consoles produced in China.

Gaming Division Faces Challenges

The company's game division saw its operating profit decrease 12.5% last quarter with PS5 sales decreasing 38% year-over-year to 2.8 million units. The business expects 16% growth in profits in the current fiscal year on the basis of sales of the company's own titles, as well as the launch of "Ghost of Yotei" in October. The postponement of the launch of "Grand Theft Auto VI" into May 2026 is set to affect the sales pace of consoles.

Strategic Realignment and Separation of Financial Services

The company is in-process of transforming its strategy with a greater emphasis on its entertainment businesses such as games, films, and music. In doing this transition, the company is spinning off its financial services business in October but holding less than a 20% stake. It is doing this with the aim of simplifying its business and focusing its energies on core entertainment businesses.

Sony is taking proactive action in countering the financial implications of U.S. tariffs with potential price increases and operational changes. Whereas the game division encounters near-term challenges, the emphasis on first-party game titles and strategic reorganization sets the company up for long-term growth in the entertainment sector