The Secret History of Video Game Console Prices, Adjusted for Inflation (Updated 2024)

A Tale of Three Eras in Console Launch Pricing

The best-selling video game console of each generation in the last 30 years has been priced between $533 and $613 at launch (in 2023 US$)

If you go back another decade to the pre-disc era of 1984-94, the launch price window for market-leading consoles was $456 to $508 in today’s dollars.

If you go back yet another decade to 1976-84 (when I entered the business), top consoles’ launch pricing was a chaotic $570 to $1,174 in 2023 dollars.

If you’ve been in the games business for the last 10 to 20 years, the first statement isn’t a surprise. This has been a relatively stable time in console pricing. Nintendo has staked out their own price range with unique, lower-cost hardware.

What’s surprising is that the issue of optimal console launch pricing has actually been stable for the last 30 years, once you factor for inflation. Prior to the transition from cartridges to disc-based games it was stable for another ten years, all the way back to the mid-1980s.

Prior to that console pricing was chaotic and catastrophic. Maybe that explains why the pattern have been

I began this research 25 years ago for my “Console Wars” sessions at GDC and other events. Back then this “law” was controversial. I had to display slide after slide to document the data for skeptical audiences. “No!” I was told. “The real range for console prices is much wider than that if they have great features!”

The data was correct. If you factor out inflation this console launch price range restriction has been about the same for 40 years.

In modern times hardware makers have learned from past mistakes. Why was the PS4 less expensive at launch than the PS3, despite its radical new technology, higher manufacturing cost and seven years of inflation? Because they knew it had to be less expensive to succeed.

In this article I’ll share this rarely-studied aspect of games industry history, one that caused multiple companies led by talented people to lose billions of dollars.

Please scroll down for the inflation-adjusted charts

 

This is Worse than Game of Thrones!

Working in the games industry back in the 1980s and 1990s, I was amazed that for the first 25+ years of game consoles the leading system of every cycle had lost its leadership crown to a rival in the following generation:

• The Atari 2600 was (after a disastrous market crash wiped away all consoles) later replaced by the Nintendo NES
• The Super NES did better worldwide, but in North America it was #2 in sales, behind the Sega Genesis. Their prices were similar and “in the window,” so I call this a tie.
• The Sega Genesis, in turn, saw the next-gen Sega Saturn ($817 in 2023$) lose the #1 crown to the original Sony PlayStation PS1 (at $613 2023$). This is the moment where the impact of the launch pricing window began to emerge as a factor in market leaders falling back to #2 or #3 positions.
• The PS2 in 2000 was the first-ever new console that retained the #1 sales spot that it inherited from its predecessor, the PS1.

New high-quality systems also failed to make inroads because of cost:

• The Neo Geo adaptation of an SNK coin-op multi-game system debuted in 1990 at $1,567 2023$. SNK’s coin-op arcade games at that time had far superior graphics and audio to any home system, so their theory was that the dramatic difference in games would justify the cost of putting coin-op quality in a home machine. It didn’t sell.
• The 3DO system was envisioned as the first machine that would replace the set-top box for regular television viewing. It would leverage the power of newly-available compact disc formats (replacing the more expensive game cartridges) to offer radically increased graphic and audio quality. Apart from integrating into living room entertainment systems as a video/audio component (and being styled to resemble those expensive items), it would also have the first graphics chips that could display true 3D graphics in what was then a 2D era. Its 1993 pricing at $1,507 2023$ was similar to the prices for those living room electronics, but the system never gained momentum competing against the CD-based $613 2023$ PSX (PlayStation 1).

And even in the early 2000s the same factors were in play:

• Sony and Microsoft actually helped the Wii ($374 2023$) reach the #1 sales position in the mid to late 2000s: they priced the PS3 ($774 2023$) and the Xbox 360 ($667 2023$) above the Goldilocks zone for the first two years of sales. They gradually lowered those prices, and in September of 2008 cut both systems to $399 ($580 2023$). This was the moment when the Xbox 360 and the PS3 first entered the Goldilocks Zone with their front-line systems. It took three more years after those price cuts before the PS3 and Xbox 360 surpassed the Wii’s annual sales in 2011.

You may be thinking, “But Nintendo ignored these pricing windows twice over the last 20 years, and they succeeded twice.” You’re right, and the summary above is for traditional video game consoles that were not part of a “blue ocean’ strategy” to break through these barriers.

 

Nintendo Rearranged the Playing Field

Twice in the last 18 years — with the Wii in 2006 and the Switch in 2017 — Nintendo has turned the games world on its head by shipping a successful video game console that “broke the console rules.” (They also had a disastrous failure in the Wii U, but didn’t let that deter them from creating the Switch.)

• The Wii had a processor like that of the old PS2 and Xbox, rather than its multi-threading CPU-driven contemporary PS3 and Xbox 360 competitors. It featured a “gesture-based” interface rather than regular controllers, and highlighted games that “core gamers” found boring but that appealed to a broad market of families and older players
• The Switch is a hybrid console and hand-held game system that uses a less powerful CPU/GPU configuration than its current Sony and Microsoft rivals, and it ships with a built-in high-res display

Both of these systems shipped at prices that were about 20% below the bottom of the Goldilocks Zone, because Nintendo isn’t trying to create traditional consoles like Sony and Microsoft. They’re targeting a wider, younger family-focused audience that has its own, separate pricing window. Nintendo’s systems launched in the super-narrow $374-$379 range (in November, 2023 dollars).

 

The Launch Price Window Over the Years

Inflation makes everything we buy a little more expensive each year. We notice if the prices of avocados or orange juice jump dramatically, but in most years tracking the effect on our lives is hard to do.

It’s like watching a traditional clock. You know that the minute hand and hour hand are traveling around the clock face, but you can’t see them move.

Once we study events from 15, 25 or 35 years ago, however, the impact of inflation becomes dramatic. The current $456 to $613 “Goldilocks zone” looks generous, but the margin of error in the earlier generations of video games (adjusted for inflation) was much smaller:

• 1990: $189 to $254 (Range of $65)
• 1995: $223 to $300 (Range of $77, and less than half the prices of 2024)
• 2000: $250 to $337 (Range of $87)
• 2005: $283 to $381 (Range of $98)
• 2010:  $322 to $433 (Range of $111)

Source: US Bureau of Labor Statistics

 

Hey, what are those “Prehistoric” Consoles?

I added these early systems to the charts for the first time in 2024. This first wave of breakout cartridge-based consoles in the late 1970s and early 80s was pioneered by the Atari VCS (later the Atari 2600) and followed by Mattel’s Intellivision and Coleco’s Colecovision. (The prior Pong machines came with all of their modes built in, and there was no way to add new games.)

I was the Director of Game Development for Intellivision. Back in the early 1980s, you couldn’t watch TV at night without seeing multiple dueling TV commercials for Atari and Intellivision. Our commercials, of course, were better than theirs!

Be ready to be shocked at what our game systems cost back then, adjusted for 40+ years of inflation! We were a novelty, the first-ever “toy” that would let you play a video game at home, and during those few years people would pay over $1,000 in 2023$ just to play video games.

As you’ll see, this was a privilege that was limited to that first successful generation of consoles, and the industry collapsed at the end of 1983. No later console system anywhere close to that price has ever succeeded.

 

The Research

Here are the lists of the consoles that led sales in their eras, and those that failed to do so. The second list includes successful systems that were not market leaders, as well as machines that failed.

Key to the table headings:

• System — Console Name
• Year — Year first introduced in North America
• Units (MM) — Approximate lifetime sales in millions of dollars (from public sources)
• Price — Launch price when they first were introduced
• Nov. 2023 $ — The cost adjusted for inflation as of November 2023 (most recent data)
• Zone? — Was the system’s price within the “Goldilocks window”?

Note: If you use this data for any publication please credit this page and include a link. Some websites have rewritten past versions of this article over the last 15 years and then republished it as their own work.

 

Table 1: Console War Leaders 1985-2023 and 1977-82:

	System	Year	Units (MM)	Price		Nov. 2023$	Zone?
	Traditional:
	PS1	1995	104	$300		$613	Yes
	PS5	2020	47	$500		$595	Yes
	PS2	2000	158	$300		$546	Yes
	PS4	2013	117	$400		$533	Yes
	NES	1985	62	$180		$508	Yes
	Genesis	1989	40	$190		$482	Yes
	SNES	1991	49	$200		$456	Yes
	Non-Traditional:
	Wii	2006	102	$250		$374	Yes
	Switch	2017	133	$300		$379	Yes
	Prehistoric:
	Atari VCS/2600	1977	30	$200		$1,050	No
	Intellivision	1980	5	$300		$1,184	No
	Colecovision	1982	2	$175		$  570	Yes

 

Table 2: Console War Non-Leaders 1985-2023

	System	Year	Units (MM)	Price		Nov. 2023$	Zone?
	NeoGeo	1990	NA	$650		$1,567	No
	3DO	1993	2	$700		$1,507	No
	Saturn	1995	10	$400		$  817	No
	PS3	2006	87	$500		$  774	No
	Xbox One	2013	58	$500		$  667	No
	Xbox 360	2005	86	$400		$  644	No
	Xbox Series X/S**	2020	21	$500		$  595	Yes
	Jaguar	1993	0.25	$250		$  538	Yes
	Xbox	2001	25	$300		$  526	Yes
	TurboGrafix 16	1989	10	$200		$  507	Yes
	Wii U	2012	14	$300		$  406	No
	Nintendo 64	1996	33	$200		$  398	No
	Dreamcast	1999	11	$200		$  374	No
	GameCube	2001	22	$200		$  351	No
	** Sales total includes both systems

Inflation Rate Source: US Bureau of Labor Statistics