Today, Sony announced a shock price rise for its PlayStation 5 family of consoles. When these changes come into effect on 2nd April, those of us in the UK will see the base PS5’s retail price increase by roughly £90. The company cited “continued pressures in the global economic landscape” as the reason for the pricing changes.
Now, speaking with Eurogamer, industry analyst and research director at Ampere Analysis Piers Harding-Rolls says it is likely that both Microsoft and Nintendo will follow suit, and increase their own prices in the near future.
“The supply chain shock of the elongated increase in memory and storage prices – both essential for console hardware – means that there is some inevitability to the PlayStation hardware price increases announced by Sony today. It is likely that Sony had price protections for its components for a set period and this may well have come to an end,” Harding-Rolls said. “With no sign of prices easing largely due to demand for AI infrastructure, Sony will have made the move to protect its slim hardware margins. It wouldn’t be a surprise if Microsoft and Nintendo followed suit in the not-too-distant future.”
Harding-Rolls added that console companies such as Sony are in a “difficult position” right now. “A new wave of inflation is expected from the war in the Middle East, and this will compound the effect of the component price increases,” he explained. “This may have had an influence on the scale of these price increases – the standard PS5 will rise by $100 or 18 percent in the US with a similar increase in the UK and Europe. Aside from a direct impact on hardware companies, I think this will cause some general industry concern about what the broader impact will be on market activity.”
Continuing, Harding-Rolls said “the console and the AAA PC gaming markets rely on hardware investment to bring in new active players and drive market momentum, so if this weakens it might soften demand for new games”. He noted these added pressures have come at an “an awkward time for Sony and Microsoft” with GTA 6 – easily one of if not the most anticipated games this year – currently expected to release towards the end of this year.
“Both companies will want to take full advantage of the positive impact of this system seller release,” Harding-Rolls said. “Likewise, it’s awkward for Nintendo as it won’t want to raise the price of the Switch 2 when it is trying to establish the new platform.”
It is of course not just Sony to have have been impacted by component shortages. Earlier this year, Valve announced a delay for its highly-anticipated Steam Machines due to RAM and storage price surges. The new hardware was initially expected to arrive in the first quarter of this year, however in February, Valve said this release window had been “revisited”, with the company now hoping to release its machines on an unspecified date in the first half of the year.
For more on this topic, be sure to check out our Bertie’s feature: “It’s a perfect storm of unpreparedness, panic, and greed” – RAM prices are soaring, so what does it mean for gaming?
