The global artificial intelligence boom is beginning to reshape the gaming industry, with major console makers Sony and Nintendo warning that soaring memory chip prices are driving up hardware costs and squeezing profits.
According to a Reuters report published on May 8, the rapid expansion of AI data centers has sharply increased demand for advanced memory chips, creating supply shortages across the broader electronics sector. (Reuters)
Industry analysts say memory chip prices doubled during the first quarter of 2026 and could rise by as much as 63% in the current quarter. The shortage is affecting not only gaming consoles, but also smartphones, laptops, and automobiles, as manufacturers compete for limited semiconductor supplies. (Investing.com)
Nintendo said the surge in component costs — particularly memory chips — along with tariff-related pressures, is expected to add nearly 100 billion yen (around $638 million) to its expenses this fiscal year. The company has already increased prices for its upcoming Switch 2 console in several markets, including Japan and the United States. (Reuters)
Nintendo President Shuntaro Furukawa acknowledged that rising hardware costs and currency fluctuations influenced the company’s pricing decisions. Analysts believe the move signals that memory costs have become too severe for the company to absorb internally. (Investing.com)
The gaming giant now expects to sell 16.5 million Switch 2 units this year, lower than the 19.9 million units sold in the previous fiscal year. Investors remain concerned that continued supply-chain disruptions and higher hardware prices could weaken consumer demand. (MarketScreener)
Sony is facing similar challenges. The company recently raised PlayStation 5 prices in multiple markets, including a reported $100 increase in the United States. While Sony says it has secured sufficient memory supply for the current financial year, executives warned that prices are likely to remain elevated next year as well. (Reuters)
Sony CEO Hiroki Totoki said the company is exploring ways to reduce manufacturing costs outside of memory components, as the profitability of PS5 hardware increasingly depends on securing chips at “reasonable prices.” (Investing.com)
Despite lower projected hardware sales, Sony expects higher gaming profits this year, driven largely by software revenue and anticipation surrounding the launch of the highly awaited Grand Theft Auto VI later this year. (Reuters)
The broader semiconductor market is also under strain as AI firms aggressively secure memory supplies for large-scale computing infrastructure. Companies such as Samsung, SK Hynix, and Micron are investing billions to expand production capacity, but experts say new manufacturing lines could take at least a year to become operational. (Reuters)
Analysts warn that unless supply catches up with demand, consumers may continue seeing higher prices across gaming hardware and other electronic devices through 2027. (TechRadar)