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Consoles used to get cheaper with age — so why are PS5, Xbox, and Switch 2 going the other way? Here's what four industry analysts think about the current console landscape
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.
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.
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.
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.
Nintendo says it has no plans for further price increases, but as McWhirter says, "The big question going forward is: how long will this be sustainable?"
For all their differences, the three console makers face the same question: how much can they charge before players start walking away?
“Elliott argues that manufacturers have also become more focused on protecting their margins, with established customers seemingly willing to absorb higher prices. “Every price rise this generation has been a test, and the core audience kept passing it – on PlayStation and Nintendo anyway,” he says.”
Are gamers getting priced out?
The new dynamics of console pricing give gamers some difficult choices. Circana's Piscatella has observed a consistent pattern around recent price increases: sales jump ahead of the new prices taking effect, then decline and eventually settle at a new baseline.
Piscatella says this pattern has emerged across PlayStation, Xbox, and Switch 2, and is distinct from the natural slowdown in sales as consoles get older.
Console price cuts later in the hardware's lifecycle have traditionally made them more affordable for families and younger gamers, a dynamic that Elliott points out is now quickly disappearing.
"Budget players have always come in through used consoles and 20 quid used discs," says Elliott. The shift towards digital distribution complicates matters, particularly when it comes to buying and reselling games cheaply.
The picture isn't totally bleak, however: Piscatella argues that younger and less affluent gamers do have options, particularly on mobile devices and lower-spec PCs, where free-to-play hits like Roblox and Fortnite are widely available.
Cloud gaming could also become a more attractive option as console prices continue to rise, and subscription services can offer access to a huge library of games for a monthly fee.
The risk, though, is that console gaming increasingly becomes the preserve of older, more affluent audiences, even as gaming itself remains hugely popular.
"Consoles gained popularity for their ease of use, convenience and affordability when compared to other gaming options," says Piscatella. "Anything that decreases these factors for consoles makes them a less appealing option."
The $1,000 question
The AI boom looks set to keep pressure on component prices — and therefore console prices — for some time yet. While memory prices might eventually stabilise, neither Elliott nor Harding-Rolls expects a return to the old pattern of steadily cheaper consoles.
Retail prices are likely to remain elevated due to expensive manufacturing processes and manufacturers' reluctance to absorb costs, and Elliott expects console makers to lean on temporary promotions, not wholesale price cuts.
But will console launch prices ever breach $1,000? Harding-Rolls believes Sony and Microsoft "will have to subsidise more heavily than they would like" to keep the next generation affordable.
Ampere's August research did the maths, modelling a scenario where an incrementally updated PS6 and Xbox launched in 2028 for $1,000, finding that combined sales over their first five years could be up to 38% lower than the equivalent period for the current generation.
In other words, Sony and Microsoft beware.
Faced with these interrelated dilemmas, manufacturers might turn in a new direction and rethink their approach to hardware.
Harding-Rolls suggests, for example, that manufacturers may have to scale back their ambitions for ever-more-realistic graphics and raw performance. "The relentless push for higher-end performance will need to be moderated," he says.
McWhirter posits that we might see more hardware stratification across tiers, potentially including a cheaper Switch 2, and a growth in bundles that offer value without actually cutting console prices.
Console makers may also delay new hardware launches for the foreseeable future to assess whether component costs improve — although the mood music from memory makers like SK Hynix is bleak, with much of its production capacity already committed through 2028.
Longer generations, then, seem increasingly likely. Elliott anticipates that the PS5 will stick around well after its successor launches, and cross-generation games may let gamers delay any hardware upgrades. "The next generation won’t replace this one so much as sit on top of it," he says.
Financing could spread the upfront cost of new consoles, while trade-ins and refurbished hardware might offer cheaper entry points for gamers — albeit without solving the underlying affordability dilemma.
A new era of pay-to-play?
As we head into 2027 and beyond, the danger for console makers is that their hardware becomes a product for wealthy enthusiasts, undermining the business model that made console gaming so successful.
Hardware that once became cheaper as it aged is now becoming more expensive, at a time when households are already facing higher living costs. Rising component costs might eventually ease, but changing business models could make permanent price cuts increasingly rare.
Piscatella worries that a shrinking pool of potential buyers could ultimately threaten the economics of the entire hardware model.
"Then the question becomes at what point does the addressable market for a new console become so small as to make it unviable," says Piscatella. "We're not there yet, but the risk of getting to that point certainly exists."
