While the strong start to Switch 2 preorders has captured much of the spotlight, several other key developments in the video game industry have emerged in recent days—developments that bode well for the revenue and earnings outlook of game publishers.
Notably, the industry appears to be moving toward broad price increases for game titles. Both Nintendo and Microsoft—two of the world’s largest game publishers—have announced price hikes for their first-party titles, raising prices from $60–$70 to $80. While this move hasn’t been universally well received, it didn’t come as a major surprise to us in light of significant cost inflation in recent years and the lack of meaningful price adjustments since the start of the current console generation (2017–2020).
Importantly, these pricing changes could have knock-on effects. With two major players leading the way, other publishers may feel more comfortable implementing their own price increases in the coming months, once consumer response becomes clearer. Our view is that these higher prices are unlikely to dampen demand for AAA titles, given consumers’ strong appetite for premium gaming experiences and the significant decline in real video game prices over the past several years.
Overall, these 15-30% price increases are likely to stimulate growth in the industry as soon as 2026 and, at the same time, give a lift to margins.
In other action, there was a twist in Epic’s (Fortnite game maker) antitrust lawsuit against Apple, as a US federal judge ruled that mobile game developers can direct users to make payments outside of Apple’s App Store—payments from which Apple cannot collect commissions.
This decision marks a potential turning point for mobile game developers, for whom App Store fees represent a major cost burden. Currently, Apple charges a 30% commission on in-app purchases and first-year subscriptions, and 15% on subsequent-year subscriptions. With the new ruling, developers could reduce their payment processing costs to as low as 5%, unlocking opportunities to improve margins or reinvest savings—such as through lower prices for users—to boost downloads and revenue growth.
That said, there are a few caveats. The ruling applies only to the U.S. market; Apple is expected to appeal; and visibility is low on how widely users will adopt alternative payment methods, which will ultimately determine the extent of cost savings.
Nevertheless, this decision represents a clear step forward for game makers. Combined with increasing game prices and growing adoption of AI tools in the game development process, the industry is positioned for a strong uplift in profitability.
