PS5 Now Costs $649 and Switch 2 Follows: Players Are Paying AI's Memory Bill
Sony CEO Hiroki Totoki told The Wall Street Journal the memory shortage arrived at a "lucky" time for PlayStation. Meanwhile the PS5 sells for $649.99, the Xbox Series X for $799.99, and the Switch 2 rose to $499.99 on September 1.
Three console platforms raised prices inside a single quarter, something the console business almost never does. The trigger was not tariffs but AI data centres soaking up memory supply. Microsoft put the number in writing: console storage and memory prices have risen more than 2.5x, with another doubling expected by fall 2027. Here is the price board, the sales data and what the executives actually said ( GameHub on September 29, 2026).
"It Is Lucky": Sony's CEO Says the Quiet Part Out Loud
"Lucky" is the word Hiroki Totoki chose to describe the timing of the memory crunch.
What Totoki actually said
In the Wall Street Journal interview, the reporter noted that PlayStation hardware had reached roughly 93 million households. Asked whether Sony was luckier than Nintendo, which has just launched the Switch 2, Totoki replied: "It is lucky, you know, we are in the latter half of the lifetime cycle of a PS console. That means that we do not need to aggressively sell the console today. And rather than that, we're focusing on recurring revenue from the current, you know, the user base."
He also put a number on that base: 125 million monthly active users across the PlayStation ecosystem as of June 30.
That is why the quote stings. Selling fewer boxes is acceptable when subscriptions and content pick up the slack.
The Price Board: Every Increase in One Table
| Platform | Current price | What changed |
|---|---|---|
| PlayStation 5 (disc) | $649.99 | Up $100 in April; $150 above its 2020 launch price |
| PlayStation 5 Pro | $900 | Raised from $750 in April |
| Xbox Series X 1TB (disc) | $799.99 | Effective August 1; $300 above launch |
| Xbox Series S 512GB | $500 | Effective August 1 |
| Nintendo Switch 2 | $499.99 | Effective September 1; up $50 |
| Valve Steam Machine | $1,049 | $150 more expensive than a PS5 Pro |
Microsoft's explanation is the bluntest
Microsoft gave one reason for its third Xbox price increase since May 2025: storage and memory costs for consoles "have increased by more than 2.5x, and we expect another doubling by the fall of 2027." The hike added $100 to 512GB models and $150 to 1TB models, and the 2TB Series X is being discontinued.
Fallout One: Hardware Sales Have Already Cracked
Higher prices are hitting the hardware itself first. Circana's July 2026 report shows US video game spending down 10% year over year to $4.5 billion, with hardware sales down 29% — the lowest July hardware figure since 2020, when the shortage was caused by the pandemic, not by component costs. Software sales fell 9% over the same period.
Sony cut its own forecast
Sony's latest fiscal guidance points to an approximate 6% year-over-year decline in Game & Network Services hardware sales, with memory procurement named as a variable. Translation: this is a year Sony does not intend to make money on consoles.
Fallout Two: Financing Is the New Product
Microsoft bundled instalment and zero-interest payment options into the same announcement, framing them as ways to "make Xbox consoles more accessible." Read it plainly: when the sticker price jumps, you spread the pain monthly instead.
Sony went further. Totoki framed recurring revenue from those 125 million monthly active users as the priority, with PS Plus as the centrepiece. Valve did not escape either: the Steam Machine starts at $1,049, $150 above a PS5 Pro, after Valve hinted it would be priced close to a home console.
Why This Cycle Breaks the Old Rules
Console generations normally enter a cost-decline phase three or four years in, and manufacturers cut prices to chase install base. This generation inverted that: the PS5 and Xbox Series X moved up, and the Switch 2 followed.
The cause sits in memory, where AI data centre build-outs consumed capacity that consumer electronics used to absorb. Microsoft expects another doubling of those costs by fall 2027, and Totoki says Sony has not decided on the PS6's timing or price. Anyone waiting for the traditional mid-generation price cut is likely waiting for nothing.
The Other Side: The Manufacturers' Math Is Real
None of this is pure opportunism. Sony's CFO said months ago that the company pre-bought and locked in memory supply, and Totoki's "lucky" framing depends on the PS5 already sitting in roughly 93 million households. Nintendo is squeezed in the middle: the Switch 2 needs volume most, right when components cost the most.
Players' alternatives are shrinking too
PC builds are climbing as well, and handhelds now sit between $1,500 and $2,000. The usual substitute for a pricey console is disappearing, which is why complaining changes less than people hope. We track the same price milestones on gghubs.com for anyone comparing hardware costs.
My Take
This is not a short-term swing. The memory being consumed is capacity taken by AI, not inventory squeezed by demand, and the curve does not turn before 2027. What worries me more is the change in posture: once a platform holder decides that selling fewer consoles while collecting more subscriptions is the better business, the incentive to cut prices disappears. Sony said that part out loud, and that is the real bad news.
FAQ
When did the Switch 2 get more expensive?
The increase took effect on September 1, 2026, moving the price from $449.99 to $499.99 — the last of this generation's consoles to raise prices.
Why did the Xbox Series X reach $799.99?
Microsoft's June 2026 announcement described it as the third increase since May 2025 and attributed it to console storage and memory prices rising "by more than 2.5x."
Will the memory crunch affect the PS6?
Yes. Sony CEO Hiroki Totoki says neither the timing nor the price of the PS6 has been decided, with memory supply as the main variable.