Market research firm Ampere Analysis released a new report stating that if Sony and Microsoft's next-generation consoles (rumored to be PS6 and Xbox Project Helix) are priced as high as $1000, global console sales over the next five years could drop by approximately 39 million units compared to a $700 price point, representing a decline of up to 38%.
Piers Harding-Rolls, Senior Research Director at Ampere Analysis, pointed out in a report on August 18: "The economic logic of console gaming has undergone significant changes. If Sony and Microsoft bring new-generation consoles to market with traditional, incremental improvements and significantly raise prices, our forecasts indicate that this will severely shrink the potential audience for next-gen consoles."
The report also predicts that if prices rise sharply, player spending in the first three years after the launch of next-gen consoles will drop by about 12%, corresponding to approximately $3.4 billion. Much of this loss will likely be absorbed by rising component costs driven by artificial intelligence (AI), rather than flowing to game sellers on the platforms.
To avoid the crisis of "losing an entire generation," the report proposes three possible strategies:
Delay Release:Delay the release of PS6 and Project Helix until after the rumored 2028 window, waiting for component costs to potentially decrease.
Increase Subsidies:Sony and Microsoft absorb the higher costs themselves to maintain continuous growth in their user base.
Major Innovation:Abandon the route of relying solely on increased computing power to improve graphics, and instead explore more disruptive directions for innovation.
However, the report also candidly acknowledges that all three approaches face significant challenges. Betting on a "miraculous" drop in costs after 2028 is a huge gamble; furthermore, it is technically almost unfeasible for hardware, which has been finalized through years of design, to suddenly pivot towards a "low-cost innovation" route.
The good news is that both companies will face pressure from Nintendo—the Switch 2 is currently priced at around $500, offering a clear price advantage.
The report notes that Nintendo chose the path of "innovation over computing power" decades ago, which has now translated into the most price-competitive console on the market, without significantly compromising game quality. This case may serve as an important reference for Sony and Microsoft in their pricing decisions.