Rising console prices are by now a fact of life for gamers, no matter which platform they prefer. The PlayStation 5 and Xbox Series X — consoles that are now six years old — cost $150 and $300 more than at launch, respectively; the Nintendo Switch 2 , released in 2025, already costs $50 more. Things haven’t always been this way: back in 2013, the PS4 launched for $400, and the PS4 Slim arrived three years later for $300. Price cuts and cheaper versions were traditionally a part — a key part — of the console lifecycle. In 2026, that pattern is reversed: consoles are getting more expensive rather than cheaper, at a time when everything else is also getting price hikes, and the trend is occurring all over the world, not just in the US and Europe. To find out why prices keep rising — and whether they’ll ever come down — I spoke to four industry analysts: Rhys Elliott at Alinea Analytics, James McWhirter at Omdia, Piers Harding-Rolls at Ampere Analysis, and Mat Piscatella at Circana. (Image credit: Shutterstock / charnsitr) Whatever happened to the price cut? Traditionally, hardware makers have launched new consoles at relatively slim margins — even at times making a loss — and planned to make up the difference through games and other spending by players. Manufacturing efficiencies combined with advances in hardware, including cheaper chips and memory, have helped to reduce production costs, further cementing the durability of this model. Making use of these gains, manufacturers could then introduce slimmer versions of consoles or even reduce prices — therefore enticing more people to the platform and increasing game sales. "The hardcore [gamers] paid full whack at launch," says Alinea’s Elliott. "Families, kids, lapsed players, and more budget-conscious gamers came in later, at a lower price." In 2026, the cost reductions that underpinned this model are much harder to achieve, with advanced chips becoming more expensive to manufacture and memory prices soaring. At the same time, makers have become less willing to subsidise their hardware. "Sony and Microsoft have become more reticent to sink margin into subsidising consoles heavily this generation," says Ampere’s Harding-Rolls. The net result is that the traditional relationship between console age, manufacturing costs, and retail prices has completely broken down. (Image credit: Seagate / Microsoft) It’s not just the RAM
The PS5 and Xbox Series X launched amid the turbulence of the COVID pandemic, and supply shortages lasted well into their lifecycles. Now, we see myriad interrelated headwinds — from inflation and rising energy costs to currency fluctuations, particularly the weak yen, and US tariffs — that put even more pressure on manufacturing and retail prices. "This console generation has been characterised by macroeconomic instability," says Omdia’s McWhirter. To top things off, the AI infrastructure boom is gobbling up enormous amounts of memory, encouraging chipmakers to prioritise more profitable server products and squeezing production capacity available for consumer electronics. Consoles, which rely on DRAM for working memory and NAND flash for storage, are effectively caught in the crossfire. TrendForce estimates that memory now accounts for 23% to 42% of console component costs, compared with around 15% historically. Elliott points out that console manufacturers negotiate memory prices and volumes months in advance, potentially delaying the impact of rising costs by two to four quarters. "A console on a shelf this Christmas contains memory that may have been priced the best part of a year ago," he says. (Image credit: Sony) Same problem, different game plans
Sony, Microsoft, and Nintendo are all facing these pressures, but each has its own priorities. Sony’s PS5 is a mature platform with an established audience, and so the company is increasingly focused on making money from existing customers, including through subscriptions like PlayStation Plus. Its Q2 results , reported on November 5, illustrate this well: PS5 shipments fell from 4 million to 2. 6 million year on year, while gaming division revenue increased 9%, helped considerably by a weaker yen. "These days, Sony treats hardware as a gateway it would rather not subsidise," says Elliott. Microsoft is in a similar position with Xbox, but its games increasingly appear on PlayStation and PC alongside its own consoles — as Elliott puts it, "the console is one door among many." Elliott argues that Microsoft’s willingness to accept higher hardware prices reflects the console’s changing importance within its wider gaming business, although falling hardware sales could make it harder to attract new players. Nintendo, as is so often the case, has its own dilemma. The Switch 2 is still early in its lifecycle, meaning Nintendo needs to build up its audience while keeping the console affordable enough to attract new buyers. McWhirter argues that Nintendo is accepting pressure on short-term profitability rather than passing the full increase in component costs to customers. Omdia estimates that the market price of the Switch 2’s 12GB memory and 256GB storage increased by $162 between Q2 2025 and Q2 2026, compared with a $50 increase in its US retail price. The figure doesn’t necessarily reflect what Nintendo pays its suppliers, but illustrates the scale of the problem…