The future of game consoles is looking bleak

And now the Switch 2 is more expensive. Or at least, it will be soon. While the price is rising in Japan starting on May 25th, much of the rest of the world has some reprieve, with the changes going into effect in the US, Canada, and Europe on September 1st. That’s a few months to snap up a console at the original price. But the hike is also going into effect at just about the worst possible time, as the holiday months remain a huge sales period for game consoles, Nintendo included.

So you know things are bad if Nintendo is willing to potentially disrupt that success by making the Switch 2 more expensive. Increasing costs is typically not a way to increase sales. Just look at Sony: The company sold only 1.5 million PS5s over the last fiscal year, a whopping 46 percent drop. I don’t expect a $50 increase will have quite the same negative effect for Nintendo; the PS5 is now $150 more than it was at launch, which is a big difference. But the Switch 2 was already controversially expensive, and at a time when everyone is feeling a financial crush, consumers especially, $50 isn’t insignificant. If nothing else, the Switch 2’s early momentum is likely to slow heading into its second year. Nintendo might be able to mitigate some of that if it has big holiday games up its sleeve — I have to imagine we’ll see a jam-packed Nintendo Direct sometime before September — but there will be some impact from the hike.

More importantly, the news raises questions about the future. If a comparatively underpowered Switch 2 costs $500, what can we expect from the next generation of premium game hardware? Microsoft is already talking about the next Xbox, codenamed Project Helix, which will have all kinds of fancy new tech to make games look better. But in the current landscape, how much will that cost? Valve is launching its console-like Steam Machines this year, and we still don’t know the price. That’s a pretty clear sign that they won’t be cheap. There’s a strong chance that Nintendo will come out of all of this relatively unscathed, though the company is forecasting a 16.9 percent sales drop over the next year. But it’s hard to see an overpriced new Xbox or an expensive living room PC reaching audiences beyond the dedicated hardcore fans. In this current landscape, there’s no space for console gaming to grow.

Announcing the changes today, Nintendo said it’s raising prices “in light of changes in market conditions” and that those new conditions are “expected to extend over the medium to long term.” Translated from corporate speak, Nintendo is saying something we all know: This problem isn’t going away any time soon. The question is how much of the console space will still be left if and when it finally does.