The gaming industry is facing a sharp decline in sales of consoles, accessories, and game discs due to rising prices. Starting in September, the cost of new gaming consoles will exceed their launch prices, according to infohub.kz.
Manufacturers are reporting lower demand for devices, components, and games themselves. In July, American consumer spending on gaming hardware dropped 29% year-over-year. According to analytics firm Circana, such low sales figures have not been seen since the start of the pandemic.
The main cause of the crisis is the sharp increase in the cost of RAM and other components. Demand for chips from AI developers has led to a shortage of components in the market. As a result, the prices of Xbox Series X and PlayStation 5 consoles have risen by hundreds of dollars. Manufacturers can no longer sell devices at a loss, hoping to recoup through game sales.
For the first time in industry history, six-year-old consoles cost more than they did on launch day. Xbox head Asha Sharma acknowledged that the mass consumer is no longer willing to spend thousands of dollars on games. Executives at major companies are seeking new business models, as the current crisis threatens to alienate an entire generation of players from console gaming.