Surging AI-driven demand for memory chips pushes hardware costs higher, leaving consoles caught in the crossfire.
Concerns about the cost of hardware worldwide have grown in recent weeks across the tech and gaming industries. Costs have gone through the roof due to a growing shortage of DRAM and NAND flash memory, which are key components for both PCs and current game consoles. While PC builders have been the first to feel the heat, it’s quickly spreading to companies that make gaming hardware.
Fans were shocked a few weeks ago when 64GB of DDR5 RAM became almost as expensive as a PlayStation 5. This huge price hike is especially shocking, given that RAM had been very cheap for years. Memory wasn’t even a major budget item in the past when building a PC—CPUs and GPUs were the main expenses. Now, RAM is the most expensive part of a computer, and this is likely to have a big impact on the video game market.
It looks like Microsoft is feeling this squeeze the most. A new report stated that Microsoft partners are being told prices will rise soon due to a shortage of RAM and increasing production costs. The story says that sales reps have already warned several sources that the prices of Xbox Series consoles may rise soon or that supply may be limited.
Microsoft didn’t make any plans in advance.
This prediction doesn’t come as a complete surprise. As the AI boom drives demand and data centers consume vast amounts of high-performance memory, console makers are suddenly in a fierce battle for parts. Tech giants worldwide are investing billions of dollars in AI infrastructure. As possible future answers, some crazy ideas have been put forward, like underwater data centers or server farms in space. It’s impossible to get enough RAM.
The problem is even worse for Microsoft because both the Xbox Series X and the Xbox Series X|S need a lot of RAM, especially the Series X, which has 16GB of GDDR6 RAM. The cost of making the systems goes up as the price of DRAM does. There are reports that Microsoft may have raised prices in the short term if they did not buy a lot of memory when prices were low.
Microsoft’s new approach makes things even more complicated. Instead of pushing Xbox consoles hard as stand-alone items, the company has put a lot of effort into software integration and the Xbox Play Anywhere environment. Microsoft’s Insider Program recently added a full-screen Xbox interface for PC. This is another sign that the company may be preparing for a future in which it doesn’t have to sell as much gear.
PlayStation, on the other hand, looks like it’s sitting much more comfortably.
The same story says Sony knew about these shortages well before they became big news. The company is said to be set for months because it bought a lot of GDDR6 early, when prices were much lower. Because they were smart and planned, Sony was able to lower the PlayStation 5’s price for Black Friday. They didn’t do this out of panic, but because they could.
But Sony isn’t completely safe either. Analysts say the global AI boom isn’t likely to slow down any time soon, even though their stocks may last for 6 to 8 months. Since more money will be spent on AI over the next two years, even Sony may have to pay more for memory components in the long run.
It’s not like Nintendo is safe either. Even though it usually uses mobile RAM, which is also rising in price, the company has a history of delaying price increases for as long as possible. But in the end, they had to raise the prices of accessories and other parts because the costs of parts and taxes were going up.
Get ready for impact—the price of consoles may go up again.
In the future, the industry may be moving toward something that has never happened before: price increases for consoles in the sixth year of a generation. In the past, gear has gotten cheaper as generations have gone by. But because memory shortages are expected to last until at least 2026, if not longer, companies may have to raise prices to stay in business.
To sum up, the RAM problem is not a one-time thing. The AI arms race is changing the world’s hardware markets in ways that affect everyone, from very large businesses to casual players. People who are thinking about buying an Xbox should know that prices might go up faster than imagined, and there might not be as many available if Microsoft puts more focus on other parts of its ecosystem.
