When Nintendo announced a $450 price for the Switch 2 in April, the reaction was immediate: surprise and frustration. Priced roughly 50% above the original Switch at launch, it became Nintendo’s most expensive console in real terms. Announced amid a cost-of-living squeeze and coupled with stingy pricing for some games and services, the move left many feeling the company was extracting more from its audience. The cost positioning also blurred product lines, setting the lightweight hybrid against full-size home consoles and high-end PC handhelds such as the Steam Deck.
Fast-forward seven months: the hardware landscape has shifted considerably. Microsoft raised Xbox Series X/S prices twice, pushing Series X units into the $600–$800 range, and Sony has increased PlayStation 5 prices as well. Nintendo itself bumped the price of the original Switch. Microsoft also partnered with Asus to enter the handheld PC space with an Xbox-branded ROG device — the base ROG Xbox Ally is priced around $600, while the ROG Xbox Ally X sits near $1,000.
This generation may be the first to finish pricier than it began. Inflation is a major driver, but the core dynamic runs deeper: the era when Moore’s law reliably drove down semiconductor cost and drove hardware leaps is largely over. Surging demand for chips from sectors like artificial intelligence and automotive manufacturing is keeping component costs elevated and production capacity constrained. As a result, delivering powerful consumer electronics at low prices is becoming increasingly difficult — and mass-market game consoles are not immune.
Simply put: building affordable, high-performance consoles is getting harder, and that pressure will seriously affect mainstream console makers.
Microsoft’s recent comments only reinforce that trend: the company described its next Xbox as “very premium, very high-end,” evocative of the $1,000 Xbox Ally X and closer in spirit to an enthusiast gaming PC than a mass-market console. Faced with rising costs and constrained supply, Microsoft appears to be pivoting toward a higher-margin, enthusiast-focused strategy while leaning on cloud streaming and cross-platform publishing to reach broader audiences.
That strategic shift comes as Xbox lags in hardware market share after two generations. Sony has been quiet publicly — though a PlayStation 6 is expected eventually — and faces a similar dilemma: delivering a substantially more powerful successor to the PS5 without pricing it out of reach seems unlikely in the near term.
Reports also indicate Sony plans a handheld capable of running PS5 titles. If parity with PS5 performance is the aim, delivering competitive pricing will be exceptionally difficult. By contrast, Switch 2 and entry-level PC handhelds — typically in the $450–$650 bracket — are generally closer to PS4-level power, a sweet spot for wider affordability.
Overall spending on games is softening even as hardware prices climb, and the generational visual leap between consoles is diminishing. While the PS5 has proven there is appetite for a more powerful system, the runaway success of portable-first platforms like the Switch and the emergence of PC handhelds show gamers place substantial value on convenience and mobility. Meanwhile, major creators such as Minecraft, Roblox, and Fortnite have largely abandoned the relentless push for cutting-edge hardware, opting instead for ubiquity across devices.
In that environment, the Switch 2 occupies a favorable position. It isn’t inexpensive, but being priced under $500 would make it comparatively attractive. Developers facing ballooning production budgets may increasingly target lower-spec platforms to maximize audience reach, which could benefit Nintendo’s ecosystem.
So far, consumer response has been strong: the Switch 2 sold roughly 10 million units within its first four months, an exceptionally rapid start. That early momentum doesn’t guarantee long-term dominance — Nintendo’s history shows follow-up systems often post strong early sales but later slow relative to their predecessors — so sustaining success will hinge on must-have games and perceived value.
All told, Nintendo may be better equipped than most to navigate the coming pressures. The company’s hardware emphasis on flexibility, portability, and relative affordability gives it an edge as the industry grapples with rising component costs and shifting player priorities.
Moore’s law • Report: gaming spending is falling
Source: Polygon
