By Zaheer Kachwala
Dec 22 (Reuters) – Videogame console sales were already under pressure owing to tariff turmoil and weak consumer spending. Now a surge in the prices of memory chips is threatening to make the devices costlier in what could be another blow to the industry.
Demand for dynamic random access memory – chips used in Sony’s PlayStation, Microsoft‘s Xbox and the Nintendo Switch 2 – has exceeded supply as the tech sector races to build out artificial intelligence infrastructure.
That has pushed memory makers to favor higher-margin data-center chips, tightening supply for consumer devices. Micron, for instance, is pulling the plug on its long-running Crucial brand, a staple for PC builders and hobbyists.
Memory chips are central to gaming systems, enabling quick load times, smooth frame rates and overall performance – features that matter most in big-budget and proven titles.
CONSOLE MAKERS FORCED TO RAISE PRICES
With rising costs related to chips, console makers and other gaming-hardware producers may be forced to raise prices as the devices are usually sold on razor-thin margins, analysts and industry experts said.
But such a move could sharply dent demand after tariff-driven hikes earlier this year, they warned. Sony, Xbox, and Nintendo did not respond to requests for comment.
CyberPowerPC, a maker of high-end gaming PCs, announced price increases late last month. Others such as Dell Technologies and China’s Lenovo also plan to raise prices, according to reports.
“Since memory makes up about a fifth of a PC’s total component costs, this hits manufacturers hard,” said Joost van Dreunen, games professor at NYU’s Stern School of Business.
He said sticker prices for consoles could rise another 10% to 15% over the next year or two, while PC prices could climb as much as 30% as memory prices rise again in 2026.
ANOTHER PRICE JUMP, DELAYS LIKELY IN 2026
Counterpoint Research estimated in November that memory prices were likely to rise 30% in the last three months of 2025 and possibly 20% more early next year, on top of the 50% hikes so far this year.
Even though major console makers such as Sony typically lock in some inventory years ahead and can extend device life-cycles to blunt the impact, some industry watchers have downgraded their forecasts for the console market.
TrendForce expects growth of just 5.8% this year, down from a previous view of 9.7%, and sees a 4.4% decline in 2026 compared with an earlier forecast of a 3.5% drop.
Spending on gaming hardware fell 27% last month, while unit sales for the period were the weakest since 1995 as the average price of a new gaming device hit a record for the month, according to industry tracker Circana.
