In a move that’s sure to ruffle feathers among gamers, both Sony and Microsoft are arguing in court that they aren’t obligated to refund consumers who paid inflated prices for PlayStation and Xbox consoles due to tariffs imposed during the Trump administration. While these companies stand to receive substantial refunds from the US government, they intend to keep the money, leaving players empty-handed.
The Refund Controversy
Following Nintendo, both Sony and Microsoft have taken a firm stance in court, arguing that they are not legally required to provide refunds to consumers who paid more for a price-hiked PlayStation or Xbox console due to the controversial tariffs. While companies are receiving these refunds, many are keeping them, sparking outrage among gamers.
In July, Sony projected to receive $508 million back in refunds from the US government related to the tariffs, with “most” of that money earmarked for Sony’s gaming division. However, Sony is now facing a lawsuit claiming they should share at least part of those refunds with consumers who paid higher prices for the PS5.
Sony’s legal team is adamant: the company will keep all the refund money and gamers will receive nothing back. “Paying fair market price for voluntarily purchased consumer goods is not a legally cognizable injury in fact,” their lawyers argued in a memo seeking to dismiss the class-action suit, as reported by Game File.
Microsoft’s legal team echoed this sentiment, stating in court, “There is nothing unjust about plaintiff purchasing an Xbox at an advertised price and getting exactly what [they] paid for…”
Sony’s Defense: More Than Just Tariffs
Sony’s argument goes further, claiming the class-action lawsuit fails to prove that tariffs were solely responsible for the PS5 price hike implemented in August 2025. They call this claim “speculative and illogical.” When announcing the price increase, Sony cited a “challenging economic environment,” but didn’s mention tariffs directly.
Sony’s legal team argues that factors like “inflation, currency fluctuations, component costs, logistics, competitive dynamics, or demand” could also have contributed to the PS5 price hike. Indeed, beyond tariffs alone, the surge in demand for components and memory – essential for manufacturing PS5 consoles – has led to shortages and increased costs for Sony and other companies in the market.
Furthermore, Sony points to its own subsequent PS5 price hike in March 2026 – after the Supreme Court deemed the tariffs illegal – as evidence that the initial price increases weren’t solely due to tariffs. “If tariffs were the cause of the price increases, one would expect SIE to lower prices once the tariffs were eliminated–not raise them again,” Sony’s lawyers argued.
Sony’s legal team concluded that the pricing of PlayStation consoles includes a “diverse and dynamic set of input costs.”
Microsoft Takes a Similar Stance
Microsoft has adopted a similar approach, arguing that the class-action suit fails to demonstrate a “pricing differential attributable to tariffs…”
Beyond the Refund: Other Controversies
Sony’s refusal to provide tariff refunds is just the latest in a series of public relations challenges for the company. They recently announced plans to end support for physical PlayStation game discs in 2028, a move that has been met with considerable backlash from gamers.
A Different Approach: Panic’s Generosity
Not all gaming companies are taking such a hard line. Panic, the company behind the Playdate gaming handheld, announced it will pass its own refunds on to customers who paid more. Customers should expect about $12 back.
“It’s just not our money to keep, and it felt really good to give it back,” said Panic’s Cabel Sasser to Game Developer. “That’s an easy way to know you made the right decision.”
Other Companies Handling Refunds Differently
While Sony and Microsoft are keeping their refunds, other companies are handling the situation differently. For example, Walmart and Home Depot have said they will use the influx of cash to lower prices on a variety of products, but not directly refund anyone.
“At the end of the day, a product is worth what somebody’s willing to pay for it, and there is a lot of choice in this marketplace,” said Bryan Eshelman, a managing director at consulting firm AlixPartners, to CNBC.
The Price Hike Continues: Nintendo’s Switch 2
While Sony and Microsoft are facing criticism for their stance on refunds, the latest gaming-related price hike came from Nintendo, which increased the price of the Switch 2 from $450 to $500 on September 1. Historically, console prices have come down over time, but the world is different today.
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