The launch of the next generation of PlayStation and Xbox consoles, potentially arriving around 2028, could face a significant sales downturn if they adopt a $1,000 price tag, according to a report from market research firm Ampere Analysis. Such a price point could negatively impact the console gaming market, costing it an estimated $3.4 billion by 2031.
Ampere Analysis's breakdown suggests that if Microsoft and Sony release "conventionally designed, incrementally improved next-generation consoles" at $1,000, sales for the PlayStation 6 and Xbox Project Helix could be 38% lower in their first five years compared to the PlayStation 5 and Xbox Series X|S over the same period. This slower adoption rate is attributed to the prohibitive cost for consumers.
The possibility of a $1,000 console is not entirely speculative, as the Nintendo Switch, PlayStation 5, and Xbox Series X|S have all experienced price increases recently due to ongoing chip shortages. The existence of the Steam Deck, which can exceed $1,000, also suggests such a price bracket is not entirely outside the realm of possibility for high-end gaming hardware.
Ampere Analysis has proposed three potential strategies for Microsoft and Sony to navigate this pricing challenge. One option is to delay the launch of next-generation consoles beyond 2028, extending the current console generation's lifecycle while observing the ongoing chip supply situation. Alternatively, companies could proceed with a 2028 launch by implementing heavier hardware subsidies, exploring new monetization models, adopting more aggressive digital content strategies, and optimizing sales channels to offset the initial hardware cost. A third approach involves a departure from incremental upgrades, focusing instead on substantial innovation in hardware form factor and use cases, deemphasizing graphical improvements to create a clearer distinction from current-generation systems and maintain lower prices, similar to Nintendo's strategy with the Wii.
Regardless of the path chosen, Ampere Analysis strongly advises against releasing consoles at a $1,000 price point, warning that doing so could make console gaming a considerably tougher sell for consumers.