A few weeks ago, Microsoft raised the prices of all its Xbox Series consoles and many of its accessories globally, and confirmed that some new games would cost $80 this holiday season. Just a week earlier, PlayStation similarly raised prices on consoles in some regions, and shortly before that, Nintendo bumped its Switch 2 accessory prices and announced its own first $80 game.
The tariff-induced price hikes have arrived, and if you’re watching it all unfold news story by news story, the numerous increases across seemingly everything can be dizzying to behold. So in an effort to make sense of it all in the wake of Xbox’s announcement, I chased down the usual conclave of analysts for comment on just what was going on, how expensive being a gamer is realistically going to get in the next year or so, and if the video game industry or Xbox or anyone is doomed. The good news is that none of the video games, consoles, or major platforms are going anywhere.
But the bad news is yes, we’re going to be paying a lot more for video games… and everything else.
Why is it all so dang expensive?
As usual, my first question to the analysts I spoke with was a simple one: why? Why did Microsoft raise its console and accessories prices now, and so drastically? Appropriately, the responses I got were also straightforward, and a refrain we’ve been hearing a lot lately: tariffs. It’s tariffs. Rising development and manufacturing costs, yes, but mainly tariffs, or at least the fear of them as U.S. President Donald Trump turns different tariffs for different countries on and off again.
“Microsoft’s consoles are made in Asia, so seriously: who in this world can now be surprised about these price hikes?” asked Dr. Serkan Toto, CEO of Kantan Games, Inc. He added that high prices were coming, one way or another, but the recent tariff chaos in the U.S. made for good timing to announce the increase with less risk of blowback. “It was a clever move from Microsoft to use the current economic climate as a backdrop to not only push the price hikes in the U.S. but also globally. What was also clever is that they did this in one fell swoop instead of riling up fans over a longer period of time and from one territory to the next.”
Joost van Dreunen, NYU Stern professor and author of the SuperJoost Playlist newsletter, agreed with Toto’s assessment of why Microsoft raised all its prices at once, instead of doing just a few increases at a time. “Microsoft is ripping off the Band-Aid all at once rather than death by a thousand cuts. I read Microsoft’s synchronized global price adjustment as a strategic recalibration in response to tariff pressures rather than incremental market testing. By implementing comprehensive increases across hardware, subscriptions, and first-party titles simultaneously, they’re consolidating consumer reaction into a single news cycle while attempting to maintain their pricing position relative to competitors in what’s becoming an increasingly service-oriented market where hardware is merely the entry point.”
Other analysts I spoke to also mentioned tariffs as a key factor. Manu Rosier, director of market intelligence at Newzoo, noted that the timing of the price increase well ahead of the holiday season gave Xbox’s partners time to adjust and consumers time to recalibrate expectations. And Rhys Elliott, head of market analysis at Alinea Analytics, pointed out that while digital software won’t be impacted by tariffs, the price increase to games would help offset the tariff-induced higher cost of hardware manufacturing. “If costs increase in one part of the business, balancing the books elsewhere is necessary. That’s largely what’s going on here.”
All that said, Piers Harding-Rolls, game research director at Ampere Analytics, pointed out the other, non-tariff factors leading to an inevitable Xbox hardware price increase:
“The macroeconomic backdrop is also a contributing factor, with higher-than-expected persistent inflation and increases in supply chain costs. The launch price of Switch 2 and Sony’s recent price hike will have made it easier to move now. It’s also not a surprise that the company waited until after the earnings announcement.
“I think Microsoft probably saw a significant gap between its entry level pricing and that of PS5 and Switch 2. Even with a 27% increase in the U.S., the cheapest Xbox Series S console is $70 cheaper than the Switch 2, so there was a lot of headroom there. The increases are generally the heaviest in the U.S. in percentage increase terms and I think we can lay that at the door of the tariff policy. Beyond the U.S., price increases in the EU and UK are generally more sedate and are more heavily focused on the cheaper consoles in the portfolio.”
Blinking Third
So, onto the bigger question: is Sony going to follow suit with price increases on PlayStation hardware, accessories, and games? Almost every analyst I asked seemed to think it was likely to do so. Elliott in particular was very confident, especially regarding the future of $80 games.
“This is just the beginning,” he said. “On top of the hardware price hikes, we’ll likely see PlayStation increasing software prices as well. With Nintendo and Xbox raising software prices, the floodgates are now open. Every publisher — first- and third-party, PC and console alike — that can charge $80 will charge it. The market will bear it. Plenty of gamers are willing to pay price points above $70, as shown by the high numbers of those willing to pay $100 for a few days’ early access (which can be in the millions for some games, as per our data).”
Elliott went on to explain that it was likely the higher ceiling would also lead to more varied pricing, with more games at $50, $60, $70, and other price points, with lower priced games able to sell more copies thanks to the perceived discount. (Notably, after we spoke with Elliott and the others, EA specifically said it would not raise prices on its games… for now.)
“Alinea data shows that when a game’s price is discounted below $50 on Steam, for example, many gamers bite the bullet and buy,” he continued. “For similar reasons, I expect to see games launching at $80, maximising launch sales among superfans, then the price decaying over time, leading to a longer tail for premium game sales. This already happens to some extent, but I think it will be an even bigger part of pricing strategies for publishers going forward.”
As for hardware, Daniel Ahmad, director of research and insights at Niko Partners, noted that Sony had just raised its console prices in certain regions, but the U.S. might be next.
“Sony has raised the price of its console multiple times outside the U.S.,” he said. “There is a reluctance from both Sony and Microsoft to raise prices in the U.S. given the size and importance of the market when it comes to console sales. That being said, we would not be surprised to see Sony follow suit with price increases on the PS5 in the U.S.”
James McWhirter, senior analyst at Omdia, had this observation to add. “PS5 hardware is predominantly manufactured in China, exposing Sony’s supply chain to greater risk from tariffs originating from the U.S.,” he said. “Yet what we consistently observe in the console market is that up to half of consoles are typically sold during Q4, the final quarter of the year. This bought both Microsoft and Sony more time to rely on existing inventories. In 2019, consoles were granted an exemption from tariffs on goods from China, but this ruling did not come into effect until August.
“With Microsoft having blinked first with price readjustments this week, it now opens the door for Sony to follow with PS5. This is going to be a particularly tough decision in the U.S., the world’s largest console market, which has historically been spared — save for PS5 Digital rising by $50 in late 2023.”
And finally, when I asked Mat Piscatella at Circana, he was reluctant to make bold predictions about what Sony would do. But he did point back at what the Entertainment Software Association had to say about the impact of tariffs on video game prices, saying that rising prices were “the symptom, not the disease.”
And notably, while we spoke to analysts about Sony specifically, Nintendo just said it may consider “what kind of price adjustments would be appropriate” if tariffs continue to change.
Video Games Are Fine… But Are We?
In the wake of Xbox’s price increases and the growing suspicion that Sony may follow suit, some have speculated that this will cause more hurt than harm to console manufacturers. It’s all well and good to make more money off consoles and accessory sales, but what if no one can afford to buy them?
Fortunately for those multi-million dollar corporations, the analysts I spoke to don’t think this is an issue. Multiple experts pointed to Microsoft’s recent ‘This Is An Xbox’ campaign as evidence that Xbox, at least, has been bracing itself for this for a while. Sure, fewer people might purchase Xboxes, but the company’s console sales have been falling behind its competitors for a long time now, and it’s already been in the process of rebranding itself as a service platform rather than an experience locked to one piece of expensive hardware. Plus, there’s always GTA 6!
“Xbox hardware sales revenue has been in decline, and I see that continuing, moderated to an extent by the higher price points,” said Harding-Rolls. “We expect a boost in Q2 2026 due to the launch of GTA 6. Last quarter Microsoft gaming hardware sales fell by 6% and the prediction is for a further drop next quarter. Overall, I think higher prices have some dampening effect, but the delay of GTA 6 is probably more significant in terms of 2025 performance.”
But more broadly, the analysts largely suggested that games spending generally would likely not take a meaningful blow — it just might shift around a bit. As Elliott explained:
“The rising prices won’t necessarily reduce spending. Even in the toughest of economic times, games are incredibly price-inelastic. The market will bear it. Early adopters will always be early adopters. PlayStation and Nintendo console sales have been tracking above or in-line with previous generations, despite consoles not dropping in price like previous generations. PlayStation actually increased its unit prices for the PS5, while Nintendo did for the Switch more stealthily by charging more for the OLED model. What’s more, in-app purchases generate vast spending these days — more than premium game purchases when looking at the market as a whole.”
And Rosier agreed: “Not necessarily a decline, but we may see shifts in where and how money is spent. As prices rise, consumers may become more selective — spending less on individual full-priced titles and more on subscriptions, discounted bundles, or long-tail live-service games. The total spend may remain steady or even grow modestly, but the distribution across formats and platforms will likely continue to evolve. Xbox’s pricing changes, and similar moves by others, could accelerate this transition toward services and ecosystems over standalone product purchases.”
Harding-Rolls added that the U.S. may feel more of the impact, given that it’s the largest console market and where the tariffs are localized. And Ahmad suggested that the Asian and MENA markets, though still impacted by global economic factors, would still see growth, especially in markets such as India, Thailand, and China. As for software, McWhirter noted that while pricing of full games has historically not followed inflation and has been more subject to consumer pushback, Xbox moving to $80 full-priced games so quickly after Nintendo suggests that more publishers will soon follow suit.
“Importantly, we don’t expect this to directly impact sales volumes, especially given 2025’s high-quality content pipeline — but publishers will continue to explore ways in which they can add value post-release,” he continued. “Many already do this via frequent discounting, multi-tiered pricing strategies, DLC, bundling. On the platform holder side, companies like Nintendo can always pull the right levers after launch — we expect Nintendo Switch Online Game Vouchers to make a return at a higher price point to accommodate $80 games.”
Piscatella was a bit less optimistic than the others, but his uncertainty echoed what every analyst I speak to regularly has been saying for months now ever since tariff discussion began: everything is uncertain, now moreso than ever, and no one actually knows for sure what’s going to happen to the economy, the global tech market, or video games.
“My expectation for the remainder of the trade war is that consumers will shift even more towards free-to-play and other more easily accessible forms of gaming, including games they already own or have access to,” Piscatella said. “Games like Fortnite, Minecraft, Roblox, etc will likely see even more players and hours spent in their ecosystems. Players will also rely on and continue to play devices they already own a bit more rather than buy new hardware. And, as prices rise in everyday spending categories like food, gas, shelter, automotive, etc, there will be fewer and fewer dollars available for categories like gaming in the U.S.
“I was trying to hold on to the +4.8% outlook I had at the beginning of the year for as long as I could, but that’s looking more and more foolishly optimistic every day. Can easily see a high single-digit percentage decline, or even into the teens, depending on the other dominoes that fall when it comes to pricing. The error bars on any forecast are bigger now than they’ve ever been given the uncertainty in the market.”
Rebekah Valentine is a senior reporter for IGN. You can find her posting on BlueSky @duckvalentine.bsky.social. Got a story tip? Send it to [email protected].
