Gamers looking to buy a new Xbox or PlayStation in the coming months are already bracing for higher prices, as surging demand from AI companies drives up the cost of memory chips. But as Microsoft and Sony work on their next-generation consoles, the recent price hikes on existing devices could look small by comparison.
A reported internal projection at Microsoft for Project Helix, the code name for the company’s next Xbox, estimates that the system could cost consumers between $1,200 and $1,800. That price could come down if Microsoft decides to subsidize the hardware.
Hardware subsidies aren’t unheard of in the video game industry. Sony, for instance, took an absolute bath on the PlayStation 3 at launch, losing $307 per unit sold. Those losses ultimately cost the company $4.7 billion over the first three years of the system’s life.
Microsoft’s gaming unit is not in a position to absorb such heavy losses, especially after disappointing hardware sales in both the current and previous console generations and the layoff of thousands of employees earlier this year.
Sony, of course, could also be looking at a significant price increase for the PlayStation 6. Leaked reports suggest the system could carry a price tag of more than $1,000.
Neither Sony nor Microsoft has publicly commented on expected retail pricing for its next-generation console.
Game over?
If reports of four-figure console prices prove accurate, the timing couldn’t be worse for the video game industry. A growing number of players are bypassing dedicated consoles in favor of mobile and PC gaming. One study by a market analysis firm found that 44% of gamers consider mobile their primary gaming platform, while 21% prefer PCs.
Meanwhile, next month will see the release of Grand Theft Auto VI, the first new mainline entry in the franchise in 13 years, which could keep players focused on current-generation consoles for the foreseeable future. Hardware companies are so concerned about shortages when the game launches that Microsoft has reportedly sent an email to some Xbox owners suggesting they trade in unused consoles at Best Buy.
“Haven’t played on your console in a while? If you’ve moved on to Xbox on PC or another way to play Xbox games, it may be time to trade in your console to Best Buy,” the message reads. Microsoft first announced its trade-in initiative in June, alongside price increases for new systems.
GTA VI, though, is expected to be a massive game that could take players as many as 150 hours to fully complete. While core gamers, who are more likely to buy a next-generation system regardless of price, may work through the game quickly, more casual players could be in no rush to move on to a new console.
Neither Sony nor Microsoft has announced an official launch date for its next-generation system. The industry initially expected the PS6 to arrive next holiday season, though its release could reportedly be delayed until 2029 in hopes that component prices will fall. Microsoft’s next Xbox is said to be targeting a 2028 release.
Sony is hoping to at least match the current generation’s sales numbers with the PS6. The PlayStation 5 has sold more than 95 million units since launch, still well below the 117 million PS4s sold over that console’s lifetime. But the PS5 will remain on the market for several more years, and its sales have been hampered by higher costs. Typically, console prices fall in the latter half of their life cycles, but surging memory prices have made that difficult.
Microsoft, meanwhile, has set wildly ambitious goals that might not be especially realistic. Xbox CEO Asha Sharma has said she wants Xbox to reach more than 1 billion people per day, roughly 10 times the company’s current daily active user base.
