PlayStation and Xbox Sales Are in Big Trouble After Massive Price Hikes – Polygon.com

Video game console prices are up and sales are way down
If you need another reason to hate generative AI, the technology is indirectly tanking gaming hardware sales. Industry analyst Circana just released a new report on U.S. game market trends for July 2026, and the numbers don’t look good.
“Hardware spending fell to a July low not seen since 2020,” Circana’s Mat Piscatella wrote on Bluesky. In July 2020, the game industry was in the midst of global supply chain issues caused by the COVID-19 pandemic, which made it difficult to purchase many game consoles.
In addition to game sales dropping 9% from last July, gaming hardware sales fell a whopping 29% from last year.
As for where AI comes into play, the tech industry’s rush to build AI data centers has created a shortage of RAM that’s used in consumer electronics. This situation has been dubbed the “RAM-pocalypse” or “RAM-geddon.” Console manufacturers have raised hardware prices significantly to cover rising component costs amid scarcity. “Higher hardware prices driven by the RAM and component crisis have significantly impacted the selling rates of both PlayStation 5 and Xbox Series X, with a price hike for Nintendo Switch 2 hardware coming on September 1st, 2026,” Piscatella wrote.
Each major console manufacturer has raised console prices in recent months. Sony upped the price of the base PS5 from $499.99 to $549.99 in August 2025, then increased it again this April by another $100. The console is now $649.99, $150 more than at release in 2020. Meanwhile, Microsoft’s Xbox Series X has gone through three price increases, with the Xbox Series X now going for $799.99, $300 more thanat launch. The Nintendo Switch 2 is getting a $50 price hike in September.
At this point in a console generation, these systems would normally see significant price cuts, something that helps bolster player bases and drive software sales. With the ongoing RAM and component shortage undercutting this trend, it’s a bit unclear how Sony and Microsoft are going to handle the next generation of consoles.
Microsoft has made the upcoming Project Helix sound like an expensive and niche platform, while Sony president and CEO Hiroki Totoki recently made it clear that Sony hasn’t set a release date for PlayStation 6. In response to the memory chip shortage, Totoki said, “We need to take some action. Otherwise, we cannot survive in this landscape.” Needless to say, the game industry has seen better days.
Graphics cards are probably about to get a lot more expensive
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Its’ going to tank phone sales next, if it hasn’t already. I wanted to upgrade my old pixel , but looks like at over $1500 I’m going to have to wait.

If new base edition consoles are going to come in at a similar price they can forget it.

Its finally time to forget about “Generations” No game should come out exclusively on the new version.

The new box should just play the game at the highest setting with the newest graphic technologies toggled on instead of off.

If they want people to fork out $1500 Sony and Microsoft (lesser extend Nintendo if they do a Switch 2 refresh) need to bundle every single one with free games and services (6 months PS+ or GamePass re-upped plus a copy of the next gen version of the hottest game pre-installed.

They also need to address what killed them this Generation, low inventory and scalpers. Limit sales at first to waves of long time users (Minimum 10 year trophy/achievement history) Scale wider and wider until stock levels off.

Also might be smart to do away with the 8 year generation cycle. Always be shipping. Always have in the pipeline the newest iteration, every 18 months. Gives time for suppliers to have parts pre-ordered.
Can’t argue with any of that. I read an article yesterday and I wish I had saved it that said, Sony should just do an incremental spec bump to the PS6. My question would be, then what’s the point of a new console? The issue I have with this current gen is a lot of games are still upscaled to 4K with settings lowered. That even applies to the PS5 Pro, which I own. I can get better graphics fidelity from my 4 year old gaming PC with an RTX 3080 than I do with either console.
Yeah, consumer spending is about to diversify again. For the price of an xbox or playstation, you could set yourself up with a killer library of tabletop games and a fancy RC car that would be more fun to drive than 90% of all the video games you’ve ever played. And still have money left over for pizza.

Those are just examples. Virtually every form of entertainment is now a better value than console gaming. That will only get worse as digital games no longer have to compete with physical games that routinely go on sale. Three years from now console gaming will be for the bougie dweebs you’ve spent your whole life trying to avoid at parties.
Or people might just start playing their backlog. I have a couple of hundred PS2/PS3/PS4/X360/XONE/WiiU games I started but never finished.
This problem will fix itself. Those who don’t have the money or don’t want to spend money on old hardware with a price increase won’t buy a console. They’ll just find a cheaper way to play games, like mobile or free live service games like Roblox or Fortnight.

The next gen consoles will have to be priced at least $1K and we are at diminishing returns already. Graphics look realistic and the spec bumps have been marginal at best. Gran Turismo 7 looks really good if not great on the PS4 as it does on the PS5. You’re not missing much. Sure GT7 was developed around the PS4 but irregardless, it looks fantastic on the PS4.

I’m wondering if Sony might reset its spec plans for the PS6 because by the time it is released it will be aged hardware. It would be better if they ate the loss, introduce the PS6 in 3-4 years with much better hardware specs. By that time, hopefully the AI bubble will have burst. I have the means to buy both the PS6 and Helix but I am checking out of the console space. This current gen PS5/Series X/S has been rather meh.
its kinda great seeing all these companies suffer a teensy bit, i hope people hold their ground.
I don’t think people are holding their ground so much as they simply cannot afford things.
greyjk thats fair. i mean combined with the physical media aspect, but in any case people find a way to roll over — i just hope less do on this.
Nothing a well formatted prompt cannot fix.
I’ve a feeling Microsoft might be looking at it’s underused data centres and it’s overpriced Xbox and putting two and two together. Chances are they’ll launch a streaming service instead of a new console. Hook the Epic Store and Steam up to it and you’ve got the ultimate games portal.

I’m all for ownership and so on but it makes sense for any game that needs the internet to play to just be streamed instead. It makes FFXIV so much better because there are no huge patches to download.
There is no RAM shortage, they are just price gouging.
The AI companies have bought up manufacturing capacity. There is as much RAM as their ever was, but the scraps have shot up in price because of the scarcity.
There’s absolutely a consumer RAM shortage, all of the allocations of production that would have been put to that for the next few years are going to AI.
finally corporate AI’s best friend has arrived, a RAM truther
its both and its coordinated.
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