Well, most folks won't care initially. So, third parties will see a good bump in revenue in the beginning. However, there's only a finite amount of money, and they're not delivering "more game" for the price bump - see Sony's PS4 -> PS5 upgrade fee. So, after a while, I believe the price hike will equate to less copies sold initially at the higher price, and that'll hurt them in the long run.
From my personal perspective, the current price AUD$100.00 means I can buy only a few games at release each year. I have to pick and chose the ones I want to play right away. For everything else, I have to wait for discounts. With Sony's push to make all their games AUD$125.00, and other publishers testing the waters, I'll be able to afford even less. So, instead of making AUD$100.00 on some of my purchases, anyone who goes to AUD$125.00 will have to settle for making ~AUD$60.00 of every purchase I make because I simply won't be able to afford their games at release. I suspect I won't be the only one in that boat.