One of the most anticipated announcements of E3 2017 was the long-awaited unveiling of what we now call the Xbox One X, the console formerly known as Project Scorpio. We’d hoped in the run up to the announcement that the console would hit the magical $399 price point, but Microsoft continually reminded us that this is a premium console in hopes of bracing us for reality. And then, on Sunday, June 11, reality hit – the Xbox One X is a $499 console. That’s a hard number for gamers to swallow, especially after the whiffed swing that was the original Xbox One launch. With this price point in mind, the team at Eurogamer‘s Digital Foundry took a look at why the system costs so much and what it means for consoles in the near future.

All signs point to $$$

Using the PlayStation 4 Pro, currently priced at $399, as a baseline, DigitalFoundry looks at where that $499 price might come from. Microsoft has confirmed that the Xbox One X will not, in itself, be a source of profit for them. It seems more likely, in fact, that they’re losing money on it. When compared to the PlayStation 4 Pro, the Xbox One X features a bigger processor, a third more RAM, a custom cooling solution, a significantly faster hard drive, and a UHD Blu-ray drive. Each of those is going to increase the cost of the system. Even at that unappealing price point, it’s easy to see how Microsoft ended up there.

But then, DigitalFoundry goes on to look at what that might mean about future consoles. One analyst believes we could see a next-gen PlayStation as early as next year. If Sony wants to offer something that would be considered a generational leap over the PlayStation 4 Pro, signs point to 2019 at the earliest, and a price point similar to that of the Xbox One X. At the moment, technology just isn’t racing ahead quite as far as it has been, so we’re looking at smaller leaps for bigger prices, and we could be looking at a very similar situation coming from Sony a couple years from now.

If Sony is indeed planning to launch a PlayStation 5 in 2018 or 2019, it’s either going to be just as expensive as the Xbox One X, or they’re going to take a bigger hit on it at the bank. With the company’s solid line of exclusive titles, they may be able to tolerate a hit like that a bit more, but Sony isn’t the beast it used to be. PlayStation accounts for a huge part of Sony’s revenue at this point, and knocking a chunk of that out with a costly new console seems unlikely.

Either way, we may be looking at, for a while at least, the norm for new hardware.