Cheap consoles mean more players. The Wii proved that as competition brought prices down amid the peak of the Xbox 360 and PS3 generations, and the inverse is likely to be true if Sony and Microsoft can’t rein in costs for the PlayStation 6 and Xbox’s Project Helix. A new report by Ampere Analysis predicts the install base for those next-gen consoles could end up being 38 percent smaller if the hardware is priced at $1,000.
“The economics of console gaming have changed significantly,” Ampere senior research director Piers Harding-Rolls wrote in the August 18 report. “If Sony and Microsoft take conventionally designed, incrementally improved consoles to market at substantially higher prices, our forecasts suggest they risk reducing the addressable audience for the next generation.”
He predicts roughly 39 million fewer PS6s and Project Helix Xboxes will be sold over their first five years if the hardware comes to market priced at $1,000 rather than $700. The forecast also predicts a roughly 12-percent drop in player spending over the first three years of the next console generation if prices skyrocket upward. That’s a difference of about $3.4 billion, much of which would be eaten up by AI-fueled component price hikes rather than going to the people who sell games on the platforms.
The report outlines three possible scenarios to avoid a lost console generation. The first is to delay the launch of the PS6 and Project Helix past their rumored 2028 window until component costs have potentially come back down a bit. The second is to subsidize hardware prices more aggressively. Sony and Microsoft would essentially eat the higher costs to keep the install base growing. The third option is to “substantially innovate” rather than just relying on more power to push graphical fidelity.
It seems hard to see either company taking either of those approaches. Hoping prices magically come back down after 2028 is a huge gamble, and it’s unclear if hardware that’s been in the design phase for years can suddenly be overhauled in favor of a cheaper value proposition that leans on new gimmicks rather than purely boosts to processing power. The good news is that at least both console makers will be facing pressure from the soon-to-be-$500 Switch 2.
Nintendo opted for innovation over power decades ago and it’s now yielded the most affordable console on the market, one that hasn’t had to compromise too much on the quality of its games.