Why are Gaming Consoles so Expensive? (5 Reasons!)

Gaming becomes more expensive every day and that is something extremely infuriating for something that was an effortless leisure time. We will take a look and try to answer why lately gaming consoles in particular became more expensive.

Before we start let’s get the following out of the way: yes, gaming PCs are more powerful and expensive but when compared to consoles the pricing for both seems reasonable. However, PC can be used not only for gaming, and the need for getting one (especially self-built) can depend on the situation.

The following are for the most part speculative reasons. Quite often we will never know what exactly is going on in the executives’ heads and why they do what they do. So take this with a pinch of salt and thermal compound.

Inflation

The first and the most obvious reason is heavy inflation across the globe. It will get a bit economical here but bear with us. It is still a very important topic to mention, especially in 2023. If you don’t know what inflation is, here’s a quick definition:

Inflation is a rise in prices, which can be translated as the decline of purchasing power over time.

Investopedia

Inflation can be caused by many things, including demand for products, production costs, and more. In our case, the additional effect had the pandemic and heavy COVID policies in China as well as political conflicts.

The point is, that during 2022 we’ve seen the peak of US inflation over the last 30 years. And similar things were happening in other parts of the world.

US Inflation rate (in %) over the past four years

This affected all of us in many ways, and one of them is gaming console prices becoming more expensive. It becomes simply not viable to sell in during periods of high inflation. This is why Sony officially announced a PlayStation 5 price increase due to the global economic environment.

Custom Build and Hardware

Making a console is not the same as building a PC. First of all the console is much smaller than a PC case that can potentially be as big as a fridge. The console must not only look good but also be able to fit all the powerful hardware to actually be an upgrade to the previous generation.

Xbox Series X inside / Image by Xbox

This calls for custom hardware parts. For a gaming PC, all the parts are widely manufactured by a ton of companies and are universal in use. You have GPUs from MSI, Gigabyte, ASUS, and tons of processors for any purpose. You can make what you want, however, you want.

For a console, the company will need to design the custom parts and manufacture them. The whole process requires much more money (including the time spent prototyping) to find a cost-effective solution that is both compact and powerful. This is why you will not see a console powered by an NVIDIA RTX 3060 graphics card or anything of the sort.

Pre-Built Gaming Station

With all the custom parts manufactured, the console is assembled from the get-go. You don’t have to do anything except for plugging it into the socket and installing a game. And that is a major difference compared to a PC.

PlayStation 5 out of the box / Image by TechCrunch

When building a PC, many things can go wrong. You have to make sure all the components are compatible, you have to make sure you have enough power to make the whole build work, and at the same time not overload your PC. Finally, you need to figure out what to plug where and properly assemble the computer. Doing something wrong may result in a short circuit or fire and ruin some of the parts.

On a console, you don’t have to worry about such a thing. Everything is ready for you to use and you don’t have to worry about choosing a power supply. You can choose to buy a pre-built PC too. But that will be even more expensive.

Exclusive Games and Franchises

Although this becomes less and less relevant with multiple acquisitions and subscription-based services like Xbox Game Pass, there are still a few exclusives around.

This applies the most to Nintendo and Nintendo Switch as they have a ton of titles that are barely available anywhere else. There’s Zelda, Mario, and Pokémon, all of which are gaming classics. This is a perfect reason to put a little extra on the price to earn more royalties from the sales. You will see the new OLED go for $335 and the barely used one for almost the same price because of the demand for those games.

Nintendo Switch games / Image by IGN

That is not only the case with Nintendo. There are still a few exclusives left on PlayStation 5 too: God of War: Ragnarok, Horizon Forbidden West, and Ghost of Tsushima are some of the biggest ones.

Exclusive games are one of the reasons people plan to buy a console and it would be foolish from a company’s perspective not to take advantage of that. The publishing company has full control over the distribution of those games. And that usually means no sales, full AAA price all year round which is a common thing on consoles.

Games Become More Expensive

Speaking of game prices, let’s not forget that along with the console you will buy at least one AAA game worth around $70. And that is a $10 bump compared to what we’ve had before and many publishers are adopting this price.

Quite often the consoles come in bundles with the game so you can immediately subtract that. And that is only one, ideally, you’d want a few to actually have fun playing on the console. 2-3 more games and you are down $200.

PlayStation 5 FIFA 23 edition

The games are extremely expensive just like consoles and they will be a big part of your overall spending on console gaming. This is why many users decide to opt-in for a subscription like Xbox Game Pass or PlayStation Plus or go for a gaming PC as their main gaming station.