It was once a truth universally acknowledged that an ageing console in possession of good revenue must be in line for a price reduction. Those days may be over. In March, Sony announced a price increase of £90 for the PS5, while last month Microsoft informed gamers that it would be charging at least £75 more for the Xbox Series S and X consoles from August. All three were first released back in 2020. The Switch 2 will also be more expensive globally from September.
The main culprit, of course, is AI, or more specifically the exploding demand for semiconductors and memory to power datacentres. Console manufacturers could once source these components cheaply, but now they’re in high demand and manufacturers can’t keep up, so deals are being struck. “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 gaming news site VGC. “Then, in October, OpenAI announced a deal with Samsung and [Korean chip manufacturer] 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, and they’re not expected to come back down any time soon.”
The problem is compounded by how narrow the business is. “The market for memory is controlled by three major companies – Samsung, SK Hynix and Micron – and building factory capacity takes years to achieve,” says Piers Harding-Rolls, games industry analyst at Ampere. “It looks like hardware companies will be waiting until the beginning of 2028 for factory capacity to open up, but it’s not clear if this will actually stabilise or reduce prices for memory.” Indeed, Lenovo’s executive director, Martin Hiegl, recently suggested that memory prices might never return to previous lower levels.
Naturally, the price hikes have hit 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 – real, unprecedented territory,” says Robinson. “In the US, there’s evidence that the market has reacted negatively. Last November, which is typically the biggest month of the year for the industry, hardware sales hit 30-year lows. Notably, the average price of new hardware hit an all-time high of $439. Last month, that figure increased to $502, and Xbox recorded its worst May ever for hardware sales, while PS5 was down 58% year-on-year.”
Things aren’t looking any better for the next generation of consoles. Analysts are predicting that the PlayStation 6 could retail at $1,000 USD, at least – the same price point as Valve’s new console-like PC, the Steam Machine. It feels like a breach of the unspoken promise of cheap hardware. For years, Sony and Microsoft absorbed a loss on each console to keep prices down, and Nintendo used cheaper components to reduce costs. Two of the biggest-selling consoles of all time – the PlayStation 2 and Nintendo DS – were noted for their reasonable, accessible launch prices: £299 and £99, respectively.
The prospect of paying a four-figure sum for a games machine is going to sting for many would-be buyers. Microsoft is offering “buy now, pay later” plans, and interest-free financing on Xbox models, which is likely to be offered on next-gen platforms, too. But hardware might not matter in the future, says Robinson, as cloud gaming could become attractive for consumers and creators alike. “Especially when GTA 6 is about to drive an incredible amount of interest in gaming from those who might not have modern consoles.” GTA V has sold 230m copies since its 2013 launch; only a small number of those fans will have transitioned to current machines. One GTA 6 trailer attracted 475 million views in its first 24 hours. While there are no plans to allow the latest iteration to be played via cloud, if consumers won’t buy the latest hardware could Take-Two turn to the potentially lucrative streaming market?
Xbox and PlayStation run cloud gaming services, but they rely heavily on excellent broadband connectivity, and resolution can be limited for many users. Perhaps the answer will be lengthened console cycles and broadened offerings. In a recent interview Hideaki Nishino, the president and CEO of Sony Interactive Entertainment, talked about its handheld remote-play device, the PS Portal, and how a hybrid approach to consoles such as the Nintendo Switch could give consumers more gaming options. There are rumours that Sony might even push out the launch of PS6 to as far as 2029, perhaps in the hope that manufacturing costs will reduce, while also giving console owners some financial breathing space.
“We do need to rethink consoles,” says Chris Dring, editor-in-chief of the Game Business. “The difference between each new generation was getting smaller from a visual perspective. We were at a stage where, to quote [former Sony boss] Shawn Layden, ‘we’re seeing graphical differences only dogs could hear’. Why do we need a PS6? We’ve not even had a Naughty Dog game yet. And I think that’s a question Sony is looking to answer.”
What to play
Released on the Wii U console in 2014, Scram Kitty was an engrossing and innovative 2D puzzler. You played as a sort of on-rails robotic skateboard, navigating the walls of a vast space station to save kidnapped cats. Now, Super Scram Kitty updates the game for the Switch, and it’s just as intense, imaginative and idiosyncratic as ever. Jumping, grinding and ricocheting between surfaces, grabbing gold coins and avoiding enemies is a heady thrill, somehow combining elements of Tony Hawk’s Pro Skater, Gravitar and Sonic the Hedgehog. It feels like a long lost SNES or Mega Drive title lovingly restored.
Available on: Nintendo Switch
Estimated playtime: 10-hours-plus
What to read
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The perils of digital content have been highlighted again this week. A staggering 550 films are to be wiped from the video libraries of PlayStation 5 even if console owners have bought the content. According to reports, this is due to the end of a licensing deal with distributor Studio Canal. It comes at a time of high tension over digital content in the games industry, which has led to the formation of a pressure group Stop Killing Games, now planning legal action against publishers over ending support for legacy gaming titles.
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Ironically, Sony Interactive Entertainment CEO, Hideaki Nishino, has been telling reporters in Japan that he wants to revitalise the live service games sector, which is dominated by titles such as Fortnite, Roblox and Minecraft. Two years ago, the company cancelled its multimillion-dollar hero shooter Concord after just two weeks. At least the customers got a refund that time.
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What can video games tell us about climate migration? The Conversation has an interesting piece looking at a range of titles exploring this issue, showing how climate change forces people from their homes and into arduous journeys across continents.
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What to click
Question Block
A super question from Jamie this week:
“I just took my son to see Supergirl and, naturally, he wants to play the video game. Is there one?”
Unfortunately, there’s no tie-in video game with Supergirl (read Peter Bradshaw’s review here). However, actor Milly Alcock’s take on the character has just been added to Fortnite, with her sidekick, Krypto. She’s available as a download in the item shop in a range of outfit styles, and with various accessories and poses. The Supergirl character alone is 1,400 V-bucks (about £9), the bundle costs 3,400 V-bucks (about £30). Otherwise, Supergirl also stars in the excellent Lego Batman 2 and Lego Batman 3, and the fighting game Injustice 2, where she’s played by veteran voice actor Laura Bailey. It’s quite a violent game, though (think Mortal Kombat with superheroes), so might not be suitable for younger kids. And if he’s tempted to look for Superman games instead, be careful – they’re famously awful. I only like The Death and Return of Superman on the Super Nintendo or at a push Superman Returns on the Xbox 360. However, he’s also in Injustice 2, if you want to set up your own Krypton family grudge match.
If you’ve got a question for Question Block – or anything else to say about the newsletter – hit reply or email us on pushingbuttons@theguardian.com.
