Price hikes are making gaming feel like a luxury hobby

• Game consoles, subscriptions, and video games themselves are getting more expensive.
• Analysts tell BI the gaming model faces pressure from all sides.
• Players with older consoles can still spend little, but staying current is getting expensive due to the memory shortage.

For years, new video games looked like one of the best deals in entertainment: buy a console, buy a game, plug them into your home television, and play for hours.

That bargain feels a lot less simple today. Price increases are hitting almost every layer of the hobby, with the memory shortage leading the charge, pushing gaming increasingly into luxury territory.

Microsoft is the most recent example. It's prepping for Xbox price increases of $100 to $150 in August — an adjustment the console-maker blamed on soaring memory and storage costs. The company had already increased hardware prices twice last year, including the Xbox Series S, which jumped from $379.99 to $399.99 in October.

Analysts tell Business Insider there isn't a simple fix to gaming's upward pricing shifts.

"The reason so many parts of gaming are getting more expensive at once is that the whole stack is under pressure," James Sheridan, CEO of Sheridan Technologies and a former firmware engineer for HP, said. "The industry is being squeezed from both ends."

Sheridan pointed to a list of pressures facing the gaming industry, including tariffs, rising hardware costs, and competition for semiconductors amid the AI boom.

The hits keep coming too. Gamers were aghast earlier this month at the higher-than-expected pricing for Valve's hotly anticipated Steam Machine, a PC designed for living room TVs that will compete directly against game consoles. It will start at $1,049, hundreds more than many gamers had expected. In May, Valve increased the prices of its popular Steam Deck portables to "reflect the current state of component costs." The lowest-cost Steam Deck handheld device is now $789, up from $549.

Nintendo's Switch 2 currently costs $449.99, but will increase to $499.99 in September. The system's Mario Kart World, priced at $79.99, has become a prominent example of the industry inching toward the era of the $80 game (Rockstar Games recently confirmed that its ever-important update to the Grand Theft Auto series will start at $79, too).

The PlayStation 5 Disc Edition's price rose from $549.99 to $649.99 in April.

Subscriptions have also seen price jumps. PlayStation Plus' monthly Essential plan went from $9.99 to $10.99 in May, while Xbox Game Pass Ultimate jumped $10 a month in October to $29.99 before the company announced a cut in April to $22.99.

PC gamers are facing their own squeeze, as memory prices continue to rise.

Dan Mazei, a principal at All Tangled Roots and the former head of communications at Activision Blizzard, told Business Insider that rising game prices are also tied to the economics of big-budget development for major, high-budget games known as AAA titles.

"Game prices will continue to grow as development cycles remain both lengthy and monumentally costly," Mazei said. "There aren't margins to easily shave, at least with AAA titles, given aggressive revenue targets against the sunk costs."

The price hikes haven't hit every player equally. A gamer with an old console and offline games can still spend very little.

It's players who want to keep up with the newest hardware, major game releases, online subscriptions, and high-end PC parts who are facing increases from nearly every direction.

"The early strategy was to acquire users and build habits," Sheridan said. "Now, consumers are not just paying higher sticker prices; they are being offered more ways to spend after they enter the ecosystem."