The price of game consoles It has always been associated with three very important keys: market situation, production costs and its life cycle. In a normal scenario, a console’s price should drop when it faces stiff competition and is in lower demand than its competitors, when its component costs drop, and when it is relatively advanced in its life cycle. which is usually after three years from its launch.

xbox series x meets all the conditions because it’s less successful than the PS5, it faces significant competition from it and also from the Nintendo Switch, even though it’s technically not in the same league, it’s cheaper to make and it’s about to be three years on the market, which means it’s been quite a long time since its launch time.

With all of this in mind, it would be normal to think that the price has dropped or that it is about to, but against all odds. at Microsoft decided that it was necessary to raise their selling price, a decision that did not surprise us because Phil Spencer had already warned about it, but it caused a lot of discomfort among consumers and the truth is that it is normal.

To be fair, Microsoft wasn’t the first to raise prices. Sony was the first to make a move in this regard, because in theory it was necessary due to the global economic situation, inflation and the fall of the euro against the dollar. The economic situation has gradually improved, inflation has moderated in many countries, and the euro is “on fire” right now because one euro is equal to 1.10 dollars.

We have a situation that, at least in Europe, should be more than enough for Sony to reconsider adjusting the price of its console (downwards) and also for Microsoft not to raise the price of the Xbox Series X, but unfortunately the opposite has happened. Before the price of consoles went down over time, it is now going upand this reduces the real value they offer users as they continue to mount hardware that is already several years old.

Why is the price of consoles going up instead of down?

The official version that Sony gave to justify the PS5 price increase was, as I told you before, global economic conditions, i.e. inflation, economic uncertainty caused by the war in Ukraine and the fall of the euro against the dollar. For its part, Microsoft said that it decided to increase the price of the Xbox Series X to better adapt it to the reality of the market and the current competition. In other words, the price rose to place it on par with PS5.

It is clear that the global economic situation can affect the price of consoles, but it is not the only determining factor. Demand is key, and production and logistics costs can also affect the final price. The exchange value of a particular currency can also affect the price of a console in a particular market dominance and success which it has on that market.

Sony realizes that the PS5 is having a golden moment, is the best-selling console of its generation and is in such high demand that the Japanese company was confident that it Increasing the selling price would not affect your sales results at all. He wasn’t wrong, the console continues to sell wonderfully and Sony doesn’t rule out re-adjusting the prices if necessary.

Over the years, the console’s manufacturing costs have been falling as the hardware it integrates has gotten cheaper and because of that the design of this is evolving, improving, simplifying and becoming cheaper. It costs Sony a lot less money to make the PS5 today than it would in 2020, but it used to sell for €499 and is now asking €549. In the end, the only winner is Sony and the loser is the consumer.

Microsoft is in a different position with the Xbox Series X, a console that, despite being more powerful than the PS5, has not had the same success and is on track to be the flop of this generation. This influenced the decision of the Redmond giant to keep the original selling price, 499 euros, but in the end the company decided to follow in the footsteps of Sony and increased the price to 549 euros. It did so in response to market conditions.

Those are the official versions, but what’s really behind it all? We have to take into account that the launch of PS5 and Xbox Series X it was not comparable to a normal launch. Availability of both consoles was very limited and speculators made it impossible to buy them at regular price. It was only a few months ago that the situation really normalized, so The demand for these consoles is so high today as it would have been at the time of its release.

In fact, the price of the consoles rose because the abnormal launch and low availability meant that few people actually had access to the PS5 and Xbox Series X. With stock normalizing it’s almost like a second launchSony knew that demand would be very high and decided to use this to raise the price of the PS5 and make more money per unit sold. This made it the Japanese company’s most profitable console today.

Microsoft simply limited themselves to following in his footsteps and positioning the Xbox Series X in the same price range as its competitorWhich seems completely normal to me. In this sense, I want to highlight one important thing, namely that the price also has a very significant marketing component and can influence the consumer. If they see that the Xbox Series X costs less than the PS5, they may think it’s because the latter is better than the former. It’s absurd for an advanced user, but believe me, many still believe it “more expensive = better”.

When will the price of PS5 and Xbox Series X drop?

I don’t have a crystal ball to give you an exact and totally reliable answer, but standardization of the technological sector is already a reality on all fronts and it is also felt in the PC graphics card market, a market that was inflated just a few months ago.

Obviously, all of this will ultimately affect the price of consoles, as we’ve reached the point where we can build a PC more powerful than the PS5 and Xbox Series X with a similar investment. This will be one of the most important keys, the loss of value of hardware due to the passage of time and the reduction of the cost of PC components.

On the other hand, we must also take into account the fact that gradually the console will lose value and generate less interest, and that when sales begin to decline, Sony and Microsoft will have no choice but to adjust prices to try to revive consumer interest in their consoles. In this sense, the sense of technological exhaustion that we’ve seen in each generation will also have an effect, which could worsen as the transition is completed and games become more and more demanding.

It is also possible that both Sony and Microsoft wait directly for the release of the review of your consoles reduce the selling price. In the case of the former, this would happen with the launch of the rumored PS5 Slim, while in the case of the latter, we would see it with the new, smaller and simpler Xbox Series X internally.