SEPT. 15, 2013 • Currency fluctuations are an inescapable hurdle in operating globally. Case in point is what the PlayStation 4 will cost in Argentina come November. Sony Computer Ent. has listed the new PlayStation 4 Argentina in its official store at 6,499 pesos ($1,136). The PS4 arrives there on November 29 as well as in other Latin American countries including Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Mexico, Panama and Peru. Only a few of those countries have official pricing on the PS4 at press time. In Mexico Sony will sell the PlayStation 4 for 7,499 Mexican pesos ($573), and in Chile buying one will cost 329,989 Chilean pesos ($657). By comparison, the PS4 will cost $399 in the U.S. and Canada, €399 ($530) in Europe, and ¥39,980 ($400) in Japan. Local tariffs can also appreciate list prices significantly in addition to currency fluctuations, but in Argentina’s case, the country is suffering from a real annual inflation rate of 25%, according to the Wall Street Journal.

Impact: Sony is going in fairly early to Latin America.  In contrast, Microsoft has only announced Brazil and Mexico as launch countries for the Xbox One. Obviously Sony feels it is important to make a clear early presence in the region despite the well-known headaches. A rapidly inflating local currency can play havoc on corporate balance sheets in a scenario where the worth of foreign tender taken today can be much less a month later. Then there can be other complications regarding how much sovereign currency some governments will allow a local division of a multi-national firm to take out of a country, or convert into dollars or euros. This is a major reason why console makers stayed out of officially distributing their products in Latin America for years despite middle class growth there. Yet the move to digital distribution changed the equation. To localize online commerce means you have to localize your console network, which means having an official presence in these emerging markets. That’s good news for consumers in these countries since they now have the benefit of more secure warranties and product pipelines, and in some cases, a break on street prices compared to the old gray markets that used to supply them with consoles and games. But wildly divergent official pricing between countries in the same region becomes a marketing headache. Let’s face it, people will peg their local pricing against the dollar, and then check what the situation is in the country next door. Sony is not responsible for inflation in Argentina, yet overcoming inflationary effects to sell more PS4s is now Sony’s problem.