san francisco – Video game console sales were already under pressure due to tariff turmoil and weak consumer spending. Currently, soaring prices for memory chips threaten to send device prices soaring, which could be a further blow to the industry.
As the technology industry races to build out artificial intelligence (AI) infrastructure, demand for dynamic random access memory (the chip used in Sony's PlayStation, Microsoft's Xbox, and Nintendo Switch 2) has outstripped supply.
This has led memory makers to favor high-margin data center chips, tightening supplies for consumer devices. For example, Micron is discontinuing its long-running Crucial brand, a staple brand for PC builders and enthusiasts.
Memory chips are at the heart of your gaming system, enabling quick load times, smooth frame rates, and overall performance. This is the most important feature in a title with a big budget and a proven track record.
Analysts and industry experts said rising costs associated with chips could force console makers and other gaming hardware makers to raise prices, as devices are typically sold on razor-thin profit margins.
But such a move could cause demand to plummet after tariff hikes in the first half of 2019. 2025they warned.
Sony, Xbox, and Nintendo did not respond to requests for comment.
High-end gaming PC maker CyberPowerPC announced price increases in late November.
According to reports, Dell Technologies and China's Lenovo are also planning to raise prices.
“Memory accounts for about one-fifth of a PC's total component cost, so this is a big blow for manufacturers,” said Joost van Dornen, a gaming professor at New York University's Stern School of Business.
He said list prices for gaming consoles could rise another 10-15% over the next year or two, while PC prices could rise by up to 30% in 2026 as memory prices rise again.
Counterpoint Research estimated in November that memory prices could rise by 30% in the last three months of 2025, on top of the 50% increase thus far, and another 20% in early 2026. 2025.
Some industry watchers are lowering their forecasts for the console market, even though major console makers such as Sony typically hold inventory for several years ahead, allowing them to extend the lifecycle of their devices to cushion the impact.
TrendForce expects growth to be only 5.8% in 2018. 2025is expected to decline by 4.4% in 2026, down from the previous forecast of 9.7% (previously forecast for a decline of 3.5%).
Spending on gaming hardware fell 27% in November, with unit sales for the period the lowest since 1995 and the average price of a new gaming device hitting its highest in the month, according to industry tracker Circana.
The average selling price of consoles is increasing year by year 2025 Tariffs on imports drive up manufacturing costs, while a lack of games for sale on the system leaves aging hardware without a significant driver of growth.
According to the company's announcement, high-end game consoles such as the Xbox Series X retail for around US$650 (Singapore dollars), while the PlayStation 5 Pro costs around US$750.
Rising component costs could also complicate the rollout of devices such as Counter-Strike developer Valve's PC gaming platform Steam Machine, scheduled for release in 2026.
Valve did not respond to a request for comment.
EMarketer analyst Jacob Bourne said companies would move cautiously if video game spending contracts more broadly. “Therefore, console manufacturers may delay launches instead of risking poor sales.” Reuters
