Question Of The Hour: How Many Gamers Will Be Priced Out With The Next Generation?

In the aftermath of Summer Game Fest, there was an air of positivity in the gaming world. While reactions to the event have varied from year to year, it’s safe to say this was the closest yet to providing fans everything they could’ve asked for. All three of the major console publishers showcased major titles — from new iterations of classic franchises like Gears of War to remakes of classics like The Legend of Zelda: Ocarina of Time. Not even a month later, though, and it feels like every headline coming from gaming is geared to make people wonder what its future is going to look like just a few years from now.

Near the end of June, Xbox confirmed they would be raising the cost of their consoles for the second time in a year. This brings the cheapest Xbox model, the 512GB Series S, to $499.99. That’s literally double what the console cost at launch, while the most expensive model — the 1TB Xbox Series X — will now be $799.99. In an industry where consoles have always decreased in price as they aged, it is surreal to be at a point where it’s possible to trade in a launch day model of a console for almost exactly what you paid to get it in the first place.

Of course, Xbox is far from the only console manufacturer raising the prices. The rising cost of materials due to the shortage of RAM and even traditional hard disk drives have driven up the cost of the PlayStation 5, with Sony announcing in March that the base model is going up to $649.99, while the PS5 Pro will be $899.99. Nintendo is much the same situation, though to a lesser extent, with the Switch 2 scheduled to rise from $450 to $500 in September.

Yet none of that comes close to the recent Steam Machine announcement. We have no idea what it was meant to cost at launch before component costs skyrocketed, but the console is currently priced at $1049 for the base model, and $1349 for a 2TB model. Amazingly, neither comes with an included controller, which feels like the gaming version of accepting new phones without a charger block. It’s literally not usable out of the box, yet everyone just accepts it as the norm because “Well, you already have a controller anyway, right?”  That’s a troublesome assumption that … well, let’s come back to that later.

In the meantime, component costs aren’t just raising the cost of current-gen consoles. Already, industry insiders are pointing to the cost of materials for the eventual PlayStation 6 landing around $1000, and that’s without any of the planned increases in cost that Q4 is scheduled to bring. While console makers have been known to sell units “at a loss” to increase their install bases as quickly as possible, that’s a plan that can only go so far when the materials are that expensive. Sony sold the PlayStation 3 at a $300 loss at launch and still had to sell it for $600. So there’s easily a world in which the PS6 could be sold at a loss and still cost the consumer a four-digit price, similar to the Steam Machine.

There is some irony in all this, given that publishers and developers alike seem to believe that AI can make game development cheaper, yet the infrastructure needed to make AI has driven up the cost of consoles and PC parts alike. It feels like the end result will be the same … or worse. What’s the purpose in finding a way to make games cheaper and faster, when fewer people will be able to afford the platforms the games are on? Speaking of affordability, a few more bombshells have come through in the last few days.

After months of speculation, Rockstar finally confirmed Grand Theft Auto 6‘s price as pre-order information went live. Series fans can expect to pay a whopping $79.99 for Rockstar’s latest open-world crime epic, but that’s just for the game’s “basic” edition. The game’s Ultimate Edition — which seems to add entire stores full of tattoos, cars, and clothing — is retailing for $99.99. It’s a move that only the biggest gaming franchise in the world could hope to pull off, but it’s also something game enthusiasts are concerned could open the door for other companies to raise the price of their games again to match GTA 6‘s base price. While attempting to price the average AAA title at the same cost as the most anticipated game of the last decade seems a bit out of touch, it’s the other Rockstar move audiences should really worry about.

GTA 6 has no physical edition planned now or in the future. Every “physical” version will simply ship with a case housing a redeemable code to obtain the digital download. A bold choice, but one that a franchise whose last game sold over 240 million copies could probably get away with.

Yet, just a few days later, Sony proved that it wasn’t just GTA 6 trying to get away with going digital only. On the PlayStation Blog, the company announced plans to end production of physical discs effective January 1st, 2028.  There are two points people should pull from that: firstly, despite all beliefs to the contrary, the PlayStation 6 is launching soon. Second, the device has no disc drive. To compensate, Sony plans on forcing the all-digital future on the PlayStation faithful as quickly as possible.

To many gamers, PlayStation’s shift to digital doesn’t sound like a big deal. After all, don’t most gamers already get their games digitally?  Well, for starters there’s evidence that isn’t entirely true, instead there is some … creative interpretations of the data being used. While digital is slowly overtaking physical, it isn’t quite as stark as the often-repeated notion that new game sales are 85% digital.  And as to why that matters, here’s one of many comparison shots that’s been going around lately:

In a world where PlayStation and other developers have ultimate control over what a game costs, sales like this — where stores like Amazon or even GameStop just want to get rid of excess stock — are no longer possible. Instead, games remain at launch pricing forever, outside of the rare cases where the platform holder generously decides to give us sales. After all, anything else would be “undervaluing our product”, even though PlayStation and Nintendo alike used to regularly re-release best-sellers at a $20 price point in older generations.

And this is where I want to circle back to the Steam Machine shipping without a controller. The decision works off the assumption that anyone that wants a Steam Machine already has plenty of controllers lying around — because they’re already gamers. Just like many of the moves from Xbox and PlayStation just assume that gamers have been members of the hobby for so long, they’re not going anywhere. Also, it’s “okay” to to monetize them as much as possible. The problem: many of the very people they want to squeeze more money out of actually liked physical games, and took pride in their collections. More importantly, they took pride in the fact that they actually owned the things they bought, something that PlayStation has shown us very clearly, is not true if your library is primarily digital.

It feels like, increasingly, every decision being made is to improve a company’s bottom line without considering the consumer, forgetting that the consumer is ultimately the reason any business is able to make money to begin with. Maybe fans are willing to accept the all-digital future, though I’d be willing to bet you bleed off a few million who really are serious about not ever having access to any physical copies. And I’m positive you’ll be able to find fans willing to accept a $1000 next-gen console, though I’m equally positive you’ll lose even more fans now that consoles fail to get cheaper over time; they just keep rising in price.

We’ve entered a world where gaming is more expensive than ever, and yet we somehow own less than ever. Although people want to bring up alternate methods of gaming like Xbox Game Pass and F2P games, it’s without accepting that both of those answers have problems of their own. Game Pass seems to be a large part of what’s dragging Xbox into insolvency, while most F2P experiences are solely meant to milk the consumer for even more money than if you just bought a game day one, which is the only reason these games are “free” to begin with.

When former Xbox boss Phil Spencer‘s correspondence with Microsoft’s higher-ups were released as part of their attempt to buy Activision, one thing that stood out to me was an email outright saying that console gaming had already reached the maximum amount of users it was going to have. It felt unbelievable, particularly for a medium that’s been experiencing explosive growth since the days of the Nintendo Entertainment System in the 1980s. But as we look out at a future of four-digit consoles and $80 price-tags for new games, it’s impossible not to think we’ve priced out the working class, and potentially turned off an entire generation of would-be gamers.