Generative AI has had a seismic impact on the price and availability of computer hardware. Major chip producers like Samsung, Hynix, and Micron have focused on furnishing the rapidly rising number of AI data centres around the world, and as a result, components for consumer hardware are in short supply – and have skyrocketed in price.
Memory chips have been particularly affected. Double data rate 5 (DDR5) – the current industry standard for random access memory (RAM) – now costs six to eight times as much as it did in September 2025.
“Every hardware maker in gaming is feeling the pressure simultaneously, from Nintendo to Valve to Sony,” says Joost van Dreunen, founder of the analyst firm Aldora and former CEO of SuperData Research.
The issue stems from the big names in the sector switching from building dynamic RAM (DRAM) to making high-bandwidth memory (HBM), which is specifically designed for use in data centres. The implementation of these two is completely different. “It’s not like you can take some of that AI inventory and use it in a desktop to take a different form factor,” says Ben Miles, managing director of PC builder Wired2Fire. HBM modules are integrated into servers at a high level, so retooling them as consumer DRAM is not an option.
Smaller PC component companies like Corsair and Kingston are being starved of supply. The raw materials they need to build their DRAM products are simply no longer available in the supply chain in the quantities they once were.
“Everything’s on the spot market,” Miles explains. “It’s all being traded back and forth. It’s a circular situation where you’ve got the same product going around and around, being traded for higher and higher prices.”
An interesting quirk of this situation is that older hardware that supports previous-generation DDR4 RAM rather than the newer DDR5 is suddenly in high demand again, because manufacturers want to take advantage of the cheaper cost and relative abundance of DDR4 when compared with DDR5. Miles says that old central processing units (CPUs) that are compatible with DDR4 are being “hoovered up,” resulting in price spikes for less-powerful chips.
“You can buy a Core Ultra 5 CPU cheaper than you can buy an older Core i5,” he says. “Frankly, making mid-range or entry-level desktops using the DDR5 platform makes very little sense right now. It’s a totally crazy market.”
Beyond memory
While the cost of DRAM has been making headlines due to booming prices, the shortage of memory is also affecting other pieces of hardware that go into making a console or PC.
The pricing of Nvidia GPUs, for example, has become more volatile on the back of the company not providing GDDR7 VRAM (the onboard memory that helps GPUs work) to add-in board manufacturers like Asus, Gigabyte, and MSI. These companies have to source that memory themselves in a less-than-usual market.
“A price increase for SSDs will not just affect the cost of computers; it’s in every device you own”
“We’re seeing really wild discrepancies in price,” Miles says. “Some of the manufacturers that were historically affordable are less affordable than premium brands, based on GDDR supply, costings, and stock holdings.”
He adds that it is “virtually impossible” to buy a lot of the newer graphics cards on the market.
After RAM and GPUs, Miles says that solid state drives (SSDs) are the next component whose cost is starting to skyrocket, due to AI data centres requiring the raw materials that go into making high-capacity NAND, which is used to make SSDs.
“A price increase for SSDs will not just affect the cost of computers; it’s in every device you own,” he explains. “Whether it’s a smartwatch or a phone, it’s all coming out of the same overall availability.”
Consumer cost
We’re now starting to see the price pressures faced by hardware manufacturers being passed onto consumers. For example, following a number of price increases over the past few years due to other macroeconomic conditions, Sony recently increased the RRP of the PlayStation 5 by $100.
Nintendo has yet to hike the price of the Switch 2, but the firm is facing an increase of roughly 40% for the DDR5 used in the console, which van Dreunen estimates will add an additional $18 in RAM costs per unit. The console launched last year at $449.99 in the United States, after preorders were delayed following President Trump’s tariff announcement.
A rise in retail costs for hardware could have a chilling effect on the industry. “The console and the AAA PC gaming markets rely on hardware investment to bring in new active players and drive market momentum,” says Piers Harding-Rolls, head of games research at Ampere Analysis. “So if this weakens, it might soften demand for new games.”
He says that the increase in component costs comes at an awkward time for Nintendo, which will be reluctant to raise the price of the Switch 2 at a time when the company is trying to establish its new platform. “Likewise, it’s awkward for Sony and Xbox with Grand Theft Auto 6 arriving at the end of 2026, as they will want to take full advantage of the positive impact of this system seller release.”
James McWhirter, a senior analyst at research firm Omdia, agrees that platform holders are under immense pressure, but says these companies have a number of verticals in their businesses that could help offset rising hardware costs.
“Console manufacturers also sell software, services, and peripherals, which means they have many levers they can pull to mitigate this,” he says. “Nintendo, for example, has plenty of room to adjust the pricing for Nintendo Switch Online subscriptions upward.”
One concern he sees for Nintendo specifically is the impact that hardware price increases will have on the original Switch console. The company has already hiked the price of the three original Switch models in the United States, with an increase of up to 15% being applied from last August due to “market conditions” (probably in response to the US tariff situation).
“Historically, the last generation system could provide an affordable entry point into a games catalogue for a platform holder,” McWhirter says. “With signs emerging that the spending power of middle-income households is declining in key console markets like the US, not having an affordable entry point into a console platform’s ecosystem could impact the pipeline of future generations of enthusiast early adopters.”
Steam Machine
Valve has found itself in the middle of a perfect storm. The company announced its new Steam Machine console/PC hybrid in November, powered by its SteamOS operating system, and with the potential to disrupt the console market.
But in February, Valve announced it was pushing back the launch of the Steam Machine as a result of the spike in component costs, and the company has so far stayed quiet on price. Van Dreunen says he initially expected the base model to come with a $549 price tag, but now he believes it could cost as much as $629, with the 2TB version coming in at $899.
“Valve’s smart move was making storage and memory user-upgradeable, which lets them ship a lower-spec base unit and let enthusiasts upgrade on their own,” he says. “But the core pitch of ‘console convenience at PC value’ gets harder to make when component costs keep climbing.”
Wired2Fire’s Miles would not be surprised to see Valve indefinitely delay the Steam Machine until the market calms down.
“I don’t know how they can expect to release a product with a stable MSRP [manufacturer’s suggested retail price] in a market where the bottom is not stable,” he explains. “With it being a brand new product, it wouldn’t surprise me if it’s delayed indefinitely until we see some semblance of normality return to the market.”
He thinks that even if Valve announced a launch MSRP that was $100 or even $200 more expensive than the original plan, the firm might still have to hike the price further down the line as component costs rise, which would ruin the “secret sauce of it being an affordable system.”
Impact on game development
Another area of consideration regarding the skyrocketing cost of hardware is game development. The people creating video games often require hugely powerful setups to run the software that is used to build games. Wired2Fire’s Miles sees this as another area of pressure on already embattled game studios.
“If you’ve got an IT budget that was agreed at the beginning of last year, you’re getting probably 25% fewer machines for every pound spent than you were previously,” he says.
“The speed at which the increases have come makes it all the more difficult to bear. You might have had a project where you needed to hire ten more developers to finish on time. Those ten devs would need £30,000 worth of hardware to get them up and running. Well, suddenly, that’s more like £50,000 to deliver the same project with the same profit. It’s a considerable swelling of overheads.”
“You’re getting probably 25% fewer machines for every pound spent than you were previously”
Harding Rolls adds: “This adds to the risk profile of content investments, so it might impact access to financing for some companies.”
While Miles doesn’t believe that the increasing cost of hardware will impact how games are made – “There’s always going to be an area of the market which is not particularly price sensitive,” he says – van Dreunen believes that this could be part of a move away from pushing game technology.
“We’re seeing a renaissance in handheld, browser-based games, and even board games,” he argues. “If hardware becomes more expensive and upgrade cycles slow, developers are further incentivised to optimise for existing install bases rather than chasing bleeding-edge specs. It also catalyses further digitalisation, as import taxes make physical goods operate at thin or meaningless margins, pushing everything toward digital storefronts.”
Future outlook
As AI advocates love to say, the technology is here to stay, so we need to just get used to it. But how long is its impact going to be felt in the world of hardware? The consensus from the experts we spoke to is not optimistic.
“This isn’t going away soon,” van Dreunen predicts. “The memory cost pressure is structural, not cyclical. As long as AI infrastructure buildout continues consuming fabrication capacity, consumer-grade components will remain expensive. I expect further consolidation of the hardware landscape: Microsoft continuing to exit hardware, Sony leaning more heavily on third-party manufacturing, and potentially new entrants like Valve having to rethink their pricing strategies.”
Harding Rolls adds: “I’m expecting storage and memory prices to stay high over the rest of the year at least, so unfortunately, this is unlikely to be a trend that hardware companies can simply sit out without taking some action.”
This is echoed by Omdia’s McWhirter, who says: “Memory manufacturers will continue to lean as much as possible towards serving the enterprise segment, and we continue to expect supply for consumer products to remain deprioritised.”
While Wired2Fire’s Miles shares the concerns of the other experts GamesIndustry.biz spoke to, he points to other challenges facing the AI rollout that could lead to loss in confidence in the technology’s future.
“There’s a general sort of sense in the industry that it can’t go on forever, that there will be other bottlenecks other than computer hardware and building AI data centres that start to become more prevalent,” he explains. “An availability of power, availability of completed data centres, and availability of water in the areas that they’re building them will start to become more of a bottleneck than hardware availability.”
He concludes: “It just takes a decommit from a couple of the big AI projects and suddenly the pressure of demand is released significantly.”
