Memory prices will greatly affect console price hikes

According to the latest TrendForce report, a sharp increase in memory costs has raised the bill of materials (BOM) for consumer electronics, forcing manufacturers to increase retail prices. After previously lowering 2026 forecasts for smartphones and laptops, TrendForce has now revised its game console supply forecast down to a 4.4% year-on-year decline from 3.5%. The report notes that memory price hikes affect major consoles, including the Nintendo Switch 2. Traditionally, console makers have relied on software and subscription sales for profits, using hardware price cuts and promotions to expand their user base. The Switch 2 launched at $450—higher than its predecessor—due to increased memory capacity and rising component costs. TrendForce forecasts memory modules will constitute 21–23% of Nintendo's total hardware costs in 2026, severely limiting margin flexibility and discount potential. Sony and Microsoft face even higher memory costs, exceeding 35% of their consoles' total production costs. Rising component costs complicate mid-cycle price cuts, which historically boosted sales years after launch. The inability to lower retail prices will likely weaken promotional efforts in 2026. Given the long market presence of the PS5 and Xbox Series and the Switch 2 launch, players should not expect price cuts soon, which may significantly dampen consumer demand. Considering current memory market dynamics, TrendForce expects global console sales to fall 4.4% year-on-year in 2026, warning that if memory supply and prices do not stabilize, console popularity could significantly slow or stagnate