The global race to build artificial intelligence infrastructure is tightening supplies of key memory chips, putting fresh pressure on the video game console industry already grappling with tariffs and weak consumer spending.
Videogame console sales were already under pressure owing to tariff turmoil and weak consumer spending. Now a surge in the prices of memory chips is threatening to make the devices costlier in what could be another blow to the industry.
Demand for dynamic random access memory
Demand for dynamic random access memory — chips used in Sony’s PlayStation, Microsoft’s Xbox and the Nintendo Switch 2 — has exceeded supply as the tech sector races to build out artificial intelligence infrastructure.
Demand for dynamic random access memory (DRAM) — a critical component in Sony’s PlayStation, Microsoft’s Xbox, and the upcoming Nintendo Switch 2 — is now outstripping supply as chipmakers prioritise higher-margin data-centre products for AI workloads. As a result, consumer electronics manufacturers are facing rising costs and constrained access to essential components.
Memory chips play a vital role in gaming performance, powering fast load times, smooth frame rates, and immersive gameplay. But analysts warn that soaring memory prices could force console makers, which typically operate on thin margins, to raise retail prices — risking further damage to demand after tariff-driven hikes earlier this year.
Industry experts estimate console prices could rise by 10% to 15% over the next two years, while gaming PCs may see increases of up to 30% as memory costs climb again in 2026. Counterpoint Research forecasts memory prices could rise another 30% by the end of 2025, with additional increases early next year.
Some hardware makers have already acted. CyberPowerPC recently announced price increases, while companies including Dell and Lenovo are expected to follow suit. Meanwhile, analysts have downgraded growth forecasts for the console market, with TrendForce now predicting slower growth in 2025 and a sharper decline in 2026.
Higher component costs may also delay new product launches, including Valve’s anticipated Steam Machine. Analysts say console makers are likely to move cautiously, weighing price hikes or delays rather than risking weak sales in an increasingly cost-sensitive market.
