Gaming console manufacturers are implementing substantial price increases as competition for computer chips intensifies in datacentres. The PS5 has risen £90, Xbox consoles up £75 or more, and the Switch 2 will cost more—despite all being under six years old. The core issue is competition for semiconductors and memory from the AI industry. Tariffs created initial pressure, but the decisive factor came when major technology firms secured exclusive deals for the output of the world's three dominant memory manufacturers, causing prices to increase by roughly 200%. Analysts warn these costs will remain elevated for years, since constructing new manufacturing facilities requires extended timelines and no substantial capacity expansions are expected before 2028.

The market is already showing strain, with November hardware sales hitting 30-year lows and several platforms experiencing their weakest months in recent history. The traditional business model—where Sony and Microsoft accepted losses on hardware to maintain affordability and grow market share—has fundamentally shifted. Historical consoles like the PlayStation 2 and Nintendo DS built consumer expectations around reasonable pricing; those assumptions have now been upended. Industry projections suggest the next generation could exceed $1,000 per unit, matching premium gaming computers, a threshold that could significantly constrain adoption rates unless manufacturers embrace widespread financing schemes.