Gaming consoles and games have seen unprecedented price increases over the last month. Xboxes and PlayStations now cost between ten to twenty percent more than they did at their launch five years ago. Anticipated games like Mario Kart World and the next Call of Duty will sell for $80, breaking through the existing $70 price ceiling.
Gaming markets shouldn’t work this way. Consoles have always dropped in price over time. Game prices eventually increase, but never this aggressively; the last jump from $60 to $70 occurred only three years ago. These price shocks make an already pricey hobby even more expensive and will damage the console gaming market irrevocably.
Let’s examine how we got here. Two forces, one sudden and one gradual, arrived simultaneously in mid 2025. One followed textbook economics. The other was a progressive reaction to a slowing console market.
The swift change stemmed from the U.S.’s protectionist trade policies that placed import tariffs on products from around the world in early April. Most PS5s and Xbox Series consoles manufactured in China now carry a 145% tariff to import into the States. Most Nintendo Switches produced in Vietnam face a smaller yet historically large 10% import tariff.
Sony, Microsoft, and Nintendo have done their best to mitigate the tariff’s short term impact by stockpiling and shifting some manufacturing to less impacted countries. Yet the speed of the implementation of these tariffs combined with uncertainty exacerbated by U.S. economic policy has put console makers on the defensive. Sony, Microsoft, and Nintendo are responding by passing some of the tariff cost onto their customers.
The stagnation of the console market is another factor behind the size and breadth of the price increases. While the PC and mobile gaming audience is growing rapidly, the console market has plateaued in its size and reach. The only way to continue shareholder-mandated growth is to extract more money from the existing customer base.
The tariffs and other economic uncertainties also provide an effective cover — or more cynically, an excuse — to make the kind of increases Sony, Nintendo, and Microsoft wanted to make anyway. With game development costs on the rise, $80 games feel like a target studios have been wanting to move towards for a while.
I don’t think hardware price increases were met with the same enthusiasm. Still, in the face of sudden economic headwinds, each console manufacturer is increasing prices with an aggressiveness that matches their diversification beyond the console space.
Nintendo relies entirely on the traditional console model for its business (first party games made exclusively for Nintendo systems, high margins on hardware) so its price bumps are modest: the Switch 2 kept its $450 price tag, while accessories like controllers and cases increased by $5 to $10 each.
Microsoft, with gaming revenue diversified across Xbox, PC, Switch, and PS5, has taken a more aggressive approach. Xboxes now globally cost an average of twenty percent more than they did a few weeks ago; a five year old Series X costs $600.
Sony’s platform strategy falls midway between Microsoft and Nintendo, with many AAA PS5 exclusives but more first party games porting to PC within a year or so of their PS5 release. Consequently, we’re seeing notable price bumps for the PS5 digital edition, but at about half the increase that Microsoft made (10-15%), and only across Europe, UK, and Australia. I wouldn’t be surprised to see Sony expand the PS5 price bumps to the rest of the world this summer once tariff rates start to settle and existing stockpiles dwindle in supply.
These increases are likely subject to change. Trade talks should play out over this summer that will adjust rates, especially between the U.S. and China. The U.S. may also add trade carve outs that explicitly lower import costs. But I don’t expect prices to decrease. $80 big budget games and $600 consoles are here to stay.
The long term ramifications of higher gaming prices are immense. A recent report suggests — under the worst case of high tariffs remaining after the U.S. 90-day hold — that customers will cut back on console purchases by 73%! Casual fans who years ago would buy a console to pick up Madden or Call of Duty each year will bow out of the console market entirely. There are too many competing forms of entertainment that require a fraction of the up front investment. We’ll likely see fewer hardware upgrades by the enthusiast crowd, a trend made worse by the fact that fewer games demand cutting edge processing power. General mainstream tastes will further retrench into well known titles, especially ‘black hole’ free to play games like Fortnite and Roblox.
None of this is great news for many in the gaming industry. I sense that many big studios will steer away from original ideas for fear of profitability with risk adverse customers. Small indies will continue to release at lower price points and budget-friendly hardware requirements, but discoverability will be a challenge.
The industry is ripe for disruption. I could see a pivot by an existing big player like Valve, Sony, or Microsoft to push audiences towards critically acclaimed games with mid to low budgets. These are games that can run on a range of devices and are priced at $50 or less, including titles like the RPG Clair Obscur: Expedition 33, the puzzler Blue Prince, and the card roguelike Balatro. But I doubt chasing smaller games would satisfy the unreasonably high growth and revenue expectations of Wall Street.
What really should happen is a rethink of flagship big budget games to achieve more focused and modest proportions. Games with less sprawl, more linearity, and fewer sky-high expectations around cutting-edge production values. The approach allows for more diverse ideas to attract a wider, more casual audience. The games can also run on lower-powered devices that casual players already own.
My hope is that lower price points and ambition but maximal fun could serve as a ‘back to basics’ approach that keeps gaming relevant in an otherwise fragmented entertainment world. Regardless of how the future pans out, in the face of rising tariffs and economic uncertainty, the games industry is at a crossroads. Big change is necessary.