I wouldn't say the technological race is the main problem, it's the AI ghouls gobbling up allthe world's RAM and driving memory prices through the roof, reckless wars, idiotic tariffs, and rampant inflation.

I don't think these hikes matter that much in the big picture. People are willing to pay, and unfortunately these companies know it. I am guilty as charged as well.
They know how to calculate these things. Some people will drop out because they simply cannot use that much money in a given situation, but the others will make up for it by paying more. Discounts can be applied as needed, and people will see them as an opportunity to latch on.

It’s the tech race: If a base PS5/XBXSX was still selling for the price of Switch 1 (a price which Nitendo can charge due to the low spec demands of the system), then we’d be looking at a very different situation right now.

Switch 1/2 are seeing price hikes as well though, despite not playing the tech race.

I think the numbers may disagree. PS5's last month's sales dropped pretty hard and they apparently don't even include a full month of the new price. It'll be interesting to watch its sales trajectory from now on.

I mean, a small one-time increase like S2's $450 to $500 may be (kinda) passable, but the way Sony has been handling things will definitely hurt them in the long run.

Biggest issue, for gaming, is AI.  Prices were climbing way before tariffs.  

War is going to devalue the dollar, which sucks.  

My solution is to buy way less new games and lean into emulation.  I want to retire in a handful of years, **** current prices and subscriptions.

Nah man.  It is AI.  Companies are buying literally tens of thousands of gpus and ram dimms.  And hundreds of companies are doing this.  I have seen it first hand.

"Nvidia’s AI (Data Center) revenue vastly outpaces its gaming division, accounting for over 90% of the company’s total sales. Recent full-year earnings reports show Nvidia generating around $194 billion from Data Center/AI chips, while Gaming hardware yields roughly $11 billion to $12 billion annually. [1, 2, 3]"

In retrospect, SNY should've went with an 8TF PS5 (Which I kinda think they maybe initially planned on based on the PS4/Pro and PS5 Pro TF's)
Could've launched the disc model at $399 again like PS4 and the Digital at $349. Probably would've sold millions more consoles by the time the pandemic restrictions lifted and could've been much closer to 100M sales by now, since it would be $100 cheaper than it is now.