PS5 Console Rentals Surge in Japan: Here's Why

The sudden surge in popularity of renting PS5 consoles in Japan can be attributed to a mix of economic factors, a highly anticipated game release, and a strategic move by a major retailer. Japan's GEO Corporation, a chain of over 1,000 stores that deals in renting and selling entertainment media, launched a PS5 rental service in February, which has proven to be highly successful. The service starts at a modest 980 yen (approximately $7) for a week and 1,780 yen (approximately $12.50) for two weeks. This initiative has seen between 80% to 100% of its PS5 consoles rented out across the 400 stores participating in the program.

GEO's decision to introduce PS5 rentals was influenced by a decline in their traditional DVD and CD rental business, driven by the rise of streaming services. This shift occurred around the summer of 2024. Concurrently, rumors of an impending PS5 price increase due to unfavorable exchange rates were circulating. On September 2, 2024, Sony confirmed these rumors by raising the price of the PS5 Digital Edition from 59,980 yen (about $427) to 72,980 yen (about $520), and the disc drive version from 66,980 yen (about $477) to 79,980 yen (about $569). This price hike was met with significant backlash from Japanese consumers, many of whom expressed their frustration on Sony's official X announcement, citing the steep cost for a console that was already four years old.

GEO capitalized on this dissatisfaction by leveraging its existing rental infrastructure and expertise in handling second-hand consoles. The company's ability to repair and factory reset PS5s allowed them to offer the rental service at a fraction of the cost compared to other Japanese companies, which typically charged between 4,500 to 8,900 yen per month. This affordability made it easier for curious consumers to try out the PS5 for a short period.

The timing of GEO's PS5 rental service launch was also critical. It coincided with the release of "Monster Hunter Wilds" by Capcom, a game series with a strong following in Japan. The game's limited availability on other platforms, combined with the high system requirements for PC and the relative unpopularity of Xbox in Japan, made the PS5 the preferred choice for many gamers. However, the console's high price was a barrier, making GEO's rental service an attractive solution for those eager to play the latest Monster Hunter installment.

GEO's rental strategy aligns with its long-standing business philosophy of making expensive products accessible at a lower cost. This approach was evident in the 1980s when GEO allowed customers to rent movies for around 1,000 yen a night, rather than purchasing them at a much higher price. Today, with the PS5 priced at nearly 80,000 yen, renting becomes a more feasible option for many, including parents and students who might find the purchase price prohibitive.

However, the cost-effectiveness of renting a PS5 may be less clear when considering additional expenses such as renting or buying games and the need for a PSN subscription for online play. Moreover, GEO's rental plans are limited to one or two weeks, with an additional charge of 500 yen per day for extensions.

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