Analysis-How AI boom is pressuring videogame console industry in race for memory chips

By Zaheer Kachwala

Dec 22 (Reuters) - Videogame console income were already nether unit owing to tariff turmoil and anemic user spending. Now a surge successful the prices of representation chips is threatening to marque the devices costlier successful what could beryllium ​another stroke to the industry.

Demand for dynamic random entree representation - chips utilized successful Sony's PlayStation, Microsoft's Xbox and the Nintendo ‌Switch 2 - has exceeded proviso arsenic the tech assemblage races to physique retired artificial quality infrastructure.

That has pushed representation makers to favour higher-margin data-center chips, tightening proviso for user devices. ‌Micron, for instance, is pulling the plug connected its long-running Crucial brand, a staple for PC builders and hobbyists.

Memory chips are cardinal to gaming systems, enabling speedy load times, creaseless framework rates and wide show - features that substance astir successful big-budget and proven titles.

CONSOLE MAKERS FORCED TO RAISE PRICES

With rising costs related to chips, console makers and different gaming-hardware producers whitethorn beryllium forced to rise prices arsenic the devices are usually sold connected razor-thin margins, ⁠analysts and manufacture experts said.

But specified a determination ‌could sharply dent request aft tariff-driven hikes earlier this year, they warned. Sony, Xbox, and Nintendo did not respond to requests for comment.

CyberPowerPC, a shaper of high-end gaming PCs, announced terms increases precocious past month. Others specified ‍as Dell Technologies and China's Lenovo besides program to rise prices, according to reports.

"Since representation makes up astir a 5th of a PC's full constituent costs, this hits manufacturers hard," said Joost van Dreunen, games prof astatine NYU's Stern School of Business.

He said sticker prices for consoles could emergence different 10% to 15% ​over the adjacent twelvemonth oregon two, portion PC prices could ascent arsenic overmuch arsenic 30% arsenic representation prices emergence again successful 2026.

ANOTHER PRICE ‌JUMP, DELAYS LIKELY IN 2026

Counterpoint Research estimated successful November that representation prices were apt to emergence 30% successful the past 3 months of 2025 and perchance 20% much aboriginal adjacent year, connected apical of the 50% hikes truthful acold this year.

Even though large console makers specified arsenic Sony typically fastener successful immoderate inventory years up and tin widen instrumentality life-cycles to blunt the impact, immoderate manufacture watchers person downgraded their forecasts for the console market.

TrendForce expects maturation of conscionable 5.8% this year, down from a erstwhile presumption of 9.7%, and sees a 4.4% diminution successful 2026 ⁠compared with an earlier forecast of a 3.5% drop.

Spending connected gaming hardware fell 27% ​last month, portion portion income for the play were the weakest since 1995 arsenic ​the mean terms of a caller gaming instrumentality deed a grounds for the month, according to manufacture tracker Circana.