Last month, Sony released its PlayStation 4 gaming console in the United States and Brazil. But they can expect few buyers in Brazil. That’s because the PlayStation 4 costs Brazilian gamers R$3,999 or about US$1,702. Compare that to a price tag of only US$400 in the United States.
Shortly after the price was announced on Sony’s Brazilian blog, thousands of passionate PlayStation fans logged on to voice their surprise and anger over the price. One of the most insightful comments circulating around the Internet is that it would be less expensive for someone in Brazil to fly to the United States, buy a PlayStation 4, spend the night in a hotel, and fly back to Brazil.
In the face of this public backlash, Sony refuses to be the bad guy. The company denied allegations of price gouging and said that the steep cost is due to Brazil’s high taxes and fees on imported electronics.
Sony’s general manager for Latin America, Mark Stanley, released a breakdown of the costs of selling the PlayStation in Brazil. His graphic shows that 63% of the retail price of the gaming console is allocated to offsetting various high import taxes and fees that apply to each PlayStation 4 that is imported into Brazil. Retailers in Brazil receive 15.5% of the retail price and Sony receives 21.5%.
Sony’s statement makes it clear that they are unhappy with the high cost, saying that it’s not in Sony’s interest for the price to be so high, and it’s not good for gamers and fans of the PlayStation 4. Their proactive position is the reason for their transparency regarding their profit margins.
Brazil is a huge and growing market for gaming systems, and Sony does not want to miss out. According to Sony, they have begun negotiations with Brazilian officials to explore the possibility of manufacturing the PlayStation 4 in Brazil. That is the only way to avoid the high import taxes and fees. Currently, the console is exclusively manufactured in China.
The PlayStation 4 won’t be the only expensive console on the market this holiday season. Microsoft recently launched the Xbox One in Brazil at R$2,200 or about US$936.
