Gaming consoles have long followed a predictable pattern: as they age, their prices drop. But that trend is now broken.
In March, Sony raised the PS5 price by £90, and Microsoft followed with a £75 increase for Xbox Series S and X in August.
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The Switch 2 will also be more expensive globally from September.
The root cause is the exploding demand for semiconductors and memory to power AI datacentres.
Console manufacturers once sourced these components cheaply, but now they face fierce competition and supply constraints.
“Initially, the wave of price increases seen in gaming were driven by tariffs imposed by Donald Trump early last year,” says Andy Robinson, editor in chief of VGC.
“Then, in October, OpenAI announced a deal with Samsung and SK Hynix to acquire a huge portion of their DRAM output for datacentres, causing prices to increase by almost 200%.
According to Xbox, those prices have since doubled again.”
The memory market is dominated by just three companies: Samsung, SK Hynix, and Micron. Building new factory capacity takes years.
“It looks like hardware companies will be waiting until the beginning of 2028 for factory capacity to open up,” says Piers Harding-Rolls, games industry analyst at Ampere.
Lenovo’s executive director, Martin Hiegl, recently suggested that memory prices might never return to previous levels.
Sales Slump and Record-High Prices
The price hikes have already hurt sales.
“Typically, at this stage of the generation, consoles could be picked up at significant discounts, but the cheapest PS5 now costs 50% more than it did in 2020,” says Robinson.
