The Nintendo Switch 2 may be the final nail in the coffin, and we should prepare for consoles to become more expensive over time.
Earlier this month, it was confirmed that the price of the Nintendo Switch 2 is increasing by $50 worldwide, effective September 1. This indicates that, like Xbox and PlayStation, Nintendo has succumbed to pressure from memory shortages and tariffs. However, according to Joost van Dreunen, a veteran analyst and co-founder of a leading gaming industry analysis firm, sold to Nielsen, this is the last domino to fall. If even Nintendo can’t stick to its traditional principles, the old rules of the gaming industry no longer apply.
Unfortunately, we’ve all grown accustomed to the fact that this is the first console generation in which prices are rising instead of falling. All three companies have raised their prices over the past six years, and Nintendo has essentially accelerated the process by announcing a price hike for the Switch 2 before the new console turned one! These price hikes have factors behind them that go beyond companies simply deciding to raise prices. However, Dreunen’s position is that if a historically conservative and financially disciplined company that builds its own hardware, owns its own intellectual property, and owes almost no one an explanation – like Nintendo – cannot resist raising prices and is accompanied by declining forecasts for console sales, then changes are to be expected.
“The question is no longer whether the pricing model needs to change. Rather, it is which version of the new model each company commits to. None of the old rules – seven-year cycles, mid-cycle price cuts, predictable refresh windows, and separable device-purchase decisions – survive the current environment intact. Forecasts based on last cycle’s assumptions are already obsolete. Nintendo’s price increase tells us that the existing economics of console gaming are breaking down. The question now is whether the industry at large will recognize what it actually sells and to whom, or if it will continue to insist that it is a technology business until the technology prices customers out of the market,” wrote van Dreunen.
Consoles will be this expensive in the future, and we’ll all have to adapt to that.
