AI’s hunger for memory chips is pushing hardware prices higher than ever before.
The latest generation of consoles is in a place that the business has never really seen before. Instead of seeing hardware prices go down as production increases, people now have to deal with the unsettling thought that prices might go up as systems reach the end of their useful lives. A few years after they came out, the prices of video game systems would drop, sometimes by a lot. This pattern went on for decades.
New versions would come out that were thinner or more efficient and usually had an easier way to get in. That pattern has been completely broken by this group.
The trend is clear across all of the big platform holders. PlayStation raised the prices of its gear by $50. When Microsoft raised the price of the Series X twice in the same year, from $499 to $649, it was an impressive rise. Nintendo raised the prices of all three versions of the Switch: the regular model, the OLED version, and the Switch Lite. Because of economic pressures outside of gaming, the usual downward trend has now suddenly turned upward.
Tariffs used to be the main topic of that talk. Companies had to deal with rising production costs caused by changing trade policies for years, usually absorbing the hit or quietly changing selling prices in response. A new threat has come forward—one that moves faster, hits harder, and doesn’t seem to be slowing down. The global race to build infrastructure for artificial intelligence is driving up the demand for advanced memory units, which could change the prices of consoles in ways that no one expected.
Reports from experts in the field paint a bleak picture. The prices of DRAM contracts have gone through the roof, sometimes going up by more than 170% year-over-year. The deal between Samsung and SK Hynix to give OpenAI almost half of the world’s DRAM output for its next-generation data centers was a big driver. The size of those buildings, which are meant to support very large AI training systems, is much bigger than anything consumer goods have ever needed. Huge new AI companies are now competing with whole supply lines for the memory that their devices need.
Some makers got ready for this to happen. Talk in the supply chain says that Sony bought a lot of GDDR6 memory earlier this year, which will protect the PlayStation 5 and PlayStation 5 Pro from any instant effects. It is said that Microsoft did not make a similar pillow, though. Sources say that sales reps have started to tell partners that supplies of Series X and Series S may get tighter, which could cause prices to go up again. If the gaps get worse, consoles might not be sold at all until the supply level is restored.
It’s not just home devices that are volatile. In just a few months, the prices of DDR5 modules in big PC markets have doubled. Charts that used to show steady drops now show sharp rises. This is one of the most dramatic changes in the market in recent memory. And under that trend is a more specific worry: LPDDR5X memory, which is widely thought to be used in Nintendo’s future Switch replacement. Its prices have gone up along with desktop modules because of competition in the same business.
During a recent investor meeting, Nintendo talked about these risks in detail. Executives stressed that the next system, which is usually called Switch 2, should continue to make money, at least for now. They said they were aware that the cost of parts was going up, but they were sure that the savings from mass production would make up for it. But the company also said that outside factors, like sudden changes in materials or problems with world supply, could change the equation.
That lack of confidence creates a unique problem. Nintendo is said to have a good stock of memory components ready for when the new hardware is first sent out. In the short run, the business is safe. On the other hand, as production grows, long-term stability relies on a market that isn’t always stable. If AI facilities keep increasing demand at the same rate, Nintendo may have to make tough choices about how much to charge for gear in the future.
The base model of Switch 2 is expected to cost $449, and a bundle version will cost $499. This makes it the most affordable platform in the next hardware cycle. As rivals work on next-generation systems that might cost around $600 or $700, Nintendo’s product could be a value anchor in a market that is rising quickly. But if memory prices stay high, that advantage may not last as long. Analysts say that if supply problems don’t go away, the Switch 2 could see a $50 price hike.
This kind of change could make people hesitate. When a higher selling price is added after the product has been released, buyers remember the original price tag, and the thought of losing value can stop adoption in its early, most crucial stages. Nintendo usually doesn’t raise prices in the middle of a product cycle, especially when they’re trying to attract a wide range of families. But the way things are now doesn’t leave much room for old rules. If memory prices go up too high and can’t be brought down, the company may have to act.
The industry as a whole is also unclear. The push for artificial general intelligence has created a demand for silicon that has never been seen before. Companies are even thinking about building data centers in the oceans and even in space. Manufacturers can’t just make more products quickly; building a new fabrication plant takes years. Gaming gear is behind one of the fastest-growing industries in the world until supply can catch up.
It’s clear what this means for customers. Adopting new hardware early may pay off, especially before the market gets used to the higher prices of parts. It used to make a lot of sense to wait for mid-generation price drops, but that approach might not work as well anymore. Things have changed because of things that aren’t related to games.
It’s still not clear whether these stresses will ease or get worse. Prices might stay the same if memory production picks up fast enough. As things stand, if the AI industry keeps growing at the rate it is now, gaps could last for years. The industry is now in uncharted territory, having to balance the release of new hardware with supply lines being pulled in ways they were never meant to handle.
In the past, console generations went in expected paths. The trend has been broken by this one. As prices go up, materials become harder to find, and technology changes around the world affect every part of the market, the future of game hardware may not depend on design or new ideas, but on memory chips that power things other than entertainment.
