Xbox Price Hike: Analysts Predict Similar Moves by PlayStation

In recent weeks, the gaming industry has seen a significant shift with major players like Microsoft, PlayStation, and Nintendo announcing price increases on their consoles and accessories. Microsoft led the charge by raising the prices of all its Xbox Series consoles and many accessories globally, alongside confirming that some new games would be priced at $80 this holiday season. Just a week prior, PlayStation followed suit by increasing console prices in select regions, while Nintendo adjusted its Switch 2 accessory prices and announced its first $80 game.

These tariff-induced price hikes have created a whirlwind of changes across the gaming landscape. To understand the broader implications, I consulted with a panel of industry analysts to discuss the reasons behind these increases, the future cost of gaming, and the potential impact on the industry. The consensus is clear: while video games, consoles, and major platforms are here to stay, gamers should brace themselves for higher costs across the board.

Why is it all so dang expensive?

The primary driver behind these price increases, as explained by analysts, is tariffs. Dr. Serkan Toto of Kantan Games, Inc., emphasized that Microsoft's consoles, manufactured in Asia, are directly affected by these tariffs. He noted that the timing of the announcement was strategic, leveraging the current economic climate to minimize backlash. "Microsoft's move to announce price hikes globally in one go was clever," Toto remarked, "allowing them to avoid prolonged consumer discontent."

Joost van Dreunen, a professor at NYU Stern and author of the SuperJoost Playlist newsletter, echoed Toto's sentiments, describing Microsoft's approach as "ripping off the Band-Aid all at once rather than death by a thousand cuts." He viewed the synchronized global price adjustment as a strategic response to tariff pressures, aiming to consolidate consumer reactions into a single news cycle while maintaining competitive pricing.

Other analysts, including Manu Rosier from Newzoo and Rhys Elliott from Alinea Analytics, also highlighted tariffs as a crucial factor. Rosier pointed out that the timing allowed Xbox's partners and consumers to adjust their expectations before the holiday season, while Elliott noted that the price increase on games would help offset the higher hardware manufacturing costs due to tariffs.

Piers Harding-Rolls from Ampere Analytics added that macroeconomic factors, such as persistent inflation and rising supply chain costs, also contributed to the price hikes. He mentioned that the launch prices of competitors like the Switch 2 and Sony's recent adjustments made it easier for Microsoft to act now. "The increases are heaviest in the U.S. due to tariff policies," Harding-Rolls stated, "but in the EU and UK, the focus is more on the cheaper consoles."

Blinking Third

The question on everyone's mind is whether Sony will follow Microsoft's lead with price increases on PlayStation hardware, accessories, and games. Most analysts believe it's likely. Rhys Elliott was particularly confident, predicting that PlayStation would also raise software prices, following the trend set by Nintendo and Xbox. "The market will bear it," he said, citing data showing gamers' willingness to pay higher prices for early access to games.

Daniel Ahmad from Niko Partners noted that Sony had already raised console prices in certain regions, and the U.S. might be next. "There is a reluctance to raise prices in the U.S. due to its importance in console sales," he said, "but we wouldn't be surprised to see Sony follow suit with the PS5."

James McWhirter from Omdia highlighted the impact of tariffs on Sony's supply chain, given that PS5 hardware is manufactured in China. He pointed out that the fourth quarter is crucial for console sales, giving both Microsoft and Sony time to rely on existing inventories. "With Microsoft having blinked first, it opens the door for Sony to follow with the PS5," McWhirter observed.

Mat Piscatella from Circana was cautious about predicting Sony's actions but referenced the Entertainment Software Association's comments on the impact of tariffs on video game prices, suggesting that rising prices are a symptom of broader economic issues. Meanwhile, Nintendo indicated it might consider further price adjustments if tariffs continue to fluctuate.

Video Games Are Fine... But Are We?

Amidst these price increases, there's concern about the potential impact on console manufacturers. However, analysts believe that the industry will adapt. Microsoft's 'This Is An Xbox' campaign suggests a shift towards a service-oriented platform, which could mitigate the impact of declining hardware sales. Piers Harding-Rolls noted that while Xbox hardware sales might continue to decline, the launch of GTA 6 in Q2 2026 could provide a boost.

Rhys Elliott emphasized that rising prices won't necessarily reduce overall spending on games, given their price-inelastic nature. He pointed out that PlayStation and Nintendo console sales have remained strong despite price increases, and in-app purchases continue to drive significant revenue.

Manu Rosier suggested that as prices rise, consumers might become more selective, shifting spending towards subscriptions, discounted bundles, and live-service games. "The total spend may remain steady or even grow modestly," Rosier said, "but the distribution across formats and platforms will evolve."

Piers Harding-Rolls noted that the U.S. might feel the impact more due to its large console market and localized tariffs. Daniel Ahmad highlighted potential growth in Asian and MENA markets, particularly in countries like India, Thailand, and China. James McWhirter mentioned that while full game pricing has historically not followed inflation, the move to $80 games by Xbox and Nintendo suggests that more publishers will follow suit.

Mat Piscatella expressed a more cautious outlook, predicting a shift towards free-to-play and accessible gaming options like Fortnite, Minecraft, and Roblox. He also anticipated that consumers might rely more on existing devices rather than purchasing new hardware, especially as everyday spending categories like food and gas become more expensive. "The error bars on any forecast are bigger now than they've ever been," Piscatella concluded, reflecting the uncertainty in the market.