The rising prices of electronic components, including semiconductors, are driving up the costs of gaming consoles, following similar trends in smartphones and laptops. The increase in memory semiconductor prices, along with currency fluctuations, tariffs, and manufacturing costs, has led global console manufacturers Sony, Nintendo, and Microsoft to implement price hikes, marking the onset of what is being termed 'console inflation.'
According to Nintendo Korea, the price of the Nintendo Switch 2 will rise from 648,000 won to 758,000 won starting September 1, representing an increase of approximately 17%. Nintendo had already adjusted prices for its existing Switch models in May, with the OLED model increasing from 415,000 won to 465,000 won, the standard model from 360,000 won to 410,000 won, and the Switch Lite from 249,800 won to 279,800 won.
Sony Interactive Entertainment (SIE) and Microsoft have also raised prices for their major consoles. The PlayStation 5 Pro is currently the most expensive console available in South Korea, priced at 1,298,000 won. Microsoft has similarly increased prices for its Xbox Series X and other consoles, with the top model in the U.S. now priced at $799.99.
Consoles are specialized gaming devices designed to run high-performance games. Many recently released blockbuster games exceed storage capacities of 50 to 100 GB, often leaving users with insufficient space on their consoles.
As a result, PlayStation 5 users are increasingly adding SSDs to secure additional game installation space. The initial costs of starting gaming have risen significantly, as consumers now must account for the console price, storage devices, extra controllers, and game titles.
The surge in console prices is attributed to the rising costs of semiconductors. In the first quarter of this year, a shortage of inventory among PC original equipment manufacturers (OEMs) led to a staggering 90-95% increase in general DRAM prices compared to the previous quarter, marking the highest quarterly increase on record. In May, the price of general-purpose DDR4 DRAM for PCs crossed the $20 mark for the first time. According to market research firm TrendForce, while the price increase has somewhat stabilized in June, DRAM prices are expected to rise by as much as 20% in the third quarter.
NAND flash, a key component used in SSDs for PCs and gaming consoles, is also experiencing continuous price hikes due to supply shortages and manufacturers shifting production lines. As of June, the average fixed transaction price for general-purpose NAND flash (128Gb MLC) was $28.82, an increase of 8.72% from the previous month, marking 18 consecutive months of price rises. The supply shortage is expected to worsen in the second half of the year, extending the longest streak of price increases.
The root cause of this semiconductor supply shortage is that major memory semiconductor companies are prioritizing production lines for high-margin AI server products. This has led to a tightening supply of less profitable products for consoles and personal computers.
The gaming industry anticipates that console prices may continue to rise next year. Additionally, the impact of the ongoing war has driven up exchange rates and logistics costs, leading to the sentiment that "today is the cheapest day" for consumers. The same trend is evident in the PC market, which is a primary platform for domestic gaming companies. As semiconductor prices have caused the cost of complete PCs to more than double, sales of gaming PCs have also plummeted.
* This article has been translated by AI.
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