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The video game industry is taking a serious beating from the global memory and storage shortage. Microsoft (MSFT), Nintendo (NTDOY), and Sony (SONY) have all raised the prices on their respective consoles to offset both the increased component costs and the prior impact of tariffs.
And that has sent sales plummeting. According to data from market research group Circana, video game hardware sales for August fell 15% year over year to their lowest August totals in 13 years.
Take Sony’s PlayStation 5, for example. A version of the console without a disc drive launched at $399 in November 2020. Today, it will cost you $599. A version with a disc drive launched at $499 and now costs $649. The high-powered PlayStation 5 Pro, which cost $699 when it debuted in 2024, is now priced at an eye-watering $899.
Microsoft has made similar moves for its Xbox Series S and Series X. The S, which originally cost $299, is now $499, while the Series X climbed $250 to $749.
Nintendo raised the price of the Switch 2 from $449 to $499 following President Trump’s “Liberation Day” tariff increases last year.
According to Circana, video game hardware spending fell 3% in August, while year-to-date spending is down 11%.
“We are seeing the negative impact of those higher price points on the consoles. We’re seeing a reduction in unit sales, driven by those higher prices,” Circana executive director of games Mat Piscatella explained.
“We’re also starting to see, spotty right now, but we’re starting to see some products becoming unavailable, likely because of the RAM and component crisis,” he added.
According to Piscatella, Sony’s PlayStation 5 Pro, in particular, is extremely hard to find, with some retailers selling used versions of the console for more than $1,000, though it’s unclear if that’s directly related to the memory and storage shortage.
The big question, for Sony and Microsoft at least, is what all of this means for the launch of Take-Two Interactive’s upcoming “Grand Theft Auto VI.” One of the most anticipated media launches in history, “GTA VI” is expected to boost console sales among consumers who have held off on purchasing systems to date.
But higher prices could give some would-be buyers pause.
“The laggards of entering this generation, I bet a bunch of them are assuming that they’re going to go to the store and pick [up a console] for $200, and instead it’s going to be $600, $700, $800, $900 to try to pick up a console to play the thing,” Piscatella said.
“I think there’s going to be some sticker shock there if the consoles are even on the shelf to begin with,” he said. “I’m sure there’s going to be some kind of moderate [sales] boost, but there are so many factors at play.”
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at@DanielHowley.
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