Gaming hardware is getting more expensive, and games aren't the reason

Gaming 4 min 80 sources

A memory shortage driven by AI datacenters is pushing consoles and PCs upward in price — reversing a decades-old pattern — while studios in the middle keep closing and the blockbusters keep breaking records.

Key takeaways

A memory shortage driven by AI datacenters is pushing up the price of consoles and gaming PCs, reversing the old pattern where machines got cheaper the longer they were on sale.
Valve, Microsoft, and analysts all point the same way: dearer hardware, forecast to cut console sales nearly 20% in 2027 unless the chip crunch eases by 2028.
The middle of the industry keeps contracting — studios liquidating and laying off staff even after shipping — while blockbusters like GTA 6 break records and publishers test new ways to make money.

For as long as most players can remember, game machines got cheaper the longer they sat on the shelf. That pattern just broke this year, and the cause has almost nothing to do with games.

The memory the machines are made of

Valve shipped its new Steam Machine last month at $1,049 / £879 — well above the price it once hoped to charge. The company says its original pricing is “no longer viable due to hardware supply issues” [38]. This week a Valve engineer went further: the shortage is “still getting worse,” and the company is “limited by memory capacity, for sure” [38]. A Valve engineer told Eurogamer the same, warning it may force a price increase [45].

The squeezed part is memory — the RAM and storage chips inside every console and PC. Those chips are, in Eurogamer’s words, “at the vanguard of the AI datacenter-driven shortages” [45]. Valve admitted it knew sourcing would be hard because of “the AI industry’s demand for data centers and memory,” but “the extent was beyond anything we actually expected.” Its response: “We’re basically building everything we can get our hands on” [38].

This is industry-wide, not one company’s problem. Microsoft has raised the price of the entire Xbox Series X and S line-up [45]. Analysts at S&P Global Market Intelligence Kagan expect console sales to fall almost 20% in 2027, to about 27.1 million units, as dearer machines price people out [39]. They only see a recovery — to 37.4 million by 2030 — if the component crunch settles by 2028 [39]. As GameSpot put it, pricier consoles are “a complete reversal of how systems used to get cheaper the longer they were on the market” [39].

The middle keeps thinning

While the big machines get dearer, the studios that make mid-sized games keep closing. This week a court ordered Midgar Studio, maker of the role-playing game Edge of Eternity, to liquidate after it failed to find a buyer [32]. At ZA/UM — the studio behind Disco Elysium — 32 workers were laid off right after they shipped a new game, Zero Parades [46]. Shipping a title no longer protects a team; the job often ends when the project does.

Ubisoft, one of the industry’s giants, is changing how it bets. It says it is moving to a “selective model” to reduce its reliance on any single game launch [27]. Fewer, safer swings — the posture of a publisher that has been burned by expensive misses.

Two guesses about where the next dollar comes from

With hardware costs up and big launches risky, publishers are hunting for new revenue — and this week showed two opposite guesses.

EA is betting on advertising. Its VP of advertising, Alexander Dao, called in-game ads a “huge opportunity” and urged studios to plan for them early in a game’s development [43]. EA launched an advertising platform in June [43]. The pitch: earn more from the same players by selling their attention.

The other guess points the opposite way. EA’s own Madden is coming to Apple Arcade — and to fit, it is dropping its microtransactions entirely [50]. Apple Arcade is a flat-fee subscription with no in-game purchases, so Madden’s Ultimate Team money machine can’t ride along [50]. One publisher, two directions in one week: sell more ads on one hand, take a fixed cut of a subscription and drop the extras on the other.

The top end is booming

None of this has slowed the giants. Rockstar’s GTA 6 has taken an estimated $260 million in pre-orders in the first week of its campaign, according to analysts at Newzoo [30], and one forecast has it earning up to $5.2 billion by the end of its launch week [24]. Fifteen years after release, Skyrim just passed 65 million copies sold [25]. Netflix says engagement on its kids’ mobile games jumped 600% year over year, though it called the figure “early days” and “off a small base” [23].

That is the shape of the week: the top selling like never before, the middle closing its doors, and the machines everyone plays on quietly getting more expensive — for a reason no gamer chose.

02 · Lesson · why it matters

When a bigger buyer walks in, the price stops being yours

The price you pay is set by whoever your supplier most wants to keep — and gaming just stopped being that buyer.

A pattern that broke

For thirty years, one rule held: a game machine got cheaper the longer it sold. The console you wanted at launch cost less by its third birthday. Players planned around it — wait a while, and the price comes down.

This year the rule reversed. Valve’s new Steam Machine costs more than the company once wanted to charge. Microsoft raised the price of its whole Xbox line. Analysts think dearer machines will push console sales down by almost a fifth in 2027.

Games didn’t get more expensive to make. The makers didn’t turn greedy. Something changed underneath all of them at once — which is the tell that the cause is not any one of them.

The same shelf, a hungrier customer

Every console and gaming PC runs on memory chips — the parts that hold the game while you play. Those chips come from a handful of suppliers. And gaming is no longer their most important customer.

The AI boom is. Building the data centers that run large AI models takes staggering amounts of the same memory. When a buyer that size walks into your supplier’s shop, you don’t get turned away — but you stop being the one the shop is built for. You wait behind them, and you pay what their appetite leaves behind.

Valve said it knew sourcing would be tight, but the scale “was beyond anything we actually expected.” Its plan now is to buy “everything we can get our hands on.” That is not the sentence of a company setting its own price. It’s the sentence of a customer who has slipped down the list.

The arrangement that looked like a law

Here is the part worth sitting with. That old rule — machines get cheaper — was never a law of nature. It felt like one because gaming was, for decades, the priority buyer. The chip factories planned their output around gaming’s demand. Prices fell over a console’s life because the whole supply chain was arranged to serve that market.

Take away gaming’s spot at the front, and the “law” evaporates. It was always just a description of who mattered most to the supplier. Now someone else matters more, and the machines get dearer — not because anything about games changed, but because the arrangement beneath them did.

Even the giants are standing in line

It is tempting to blame Sony, Microsoft, Valve. But look at where they actually stand. They are buying whatever memory they can find, at prices they don’t control, and passing the cost along because they have no other choice. The console makers, the ones who look powerful, are price-takers too.

And so are you. When you pay more for a machine this year, you are paying for a data center you will never see, in a market you never entered. The line runs from a server farm in some distant county straight to your checkout — even though nothing you did, and nothing the console maker did, set that number.

What to carry

This is not really about chips. It is about what happens to yesterday’s most important customer when a bigger one arrives.

When you are the buyer a market is built around, you barely notice the power you hold. The falling prices feel like progress, like something you earned. You didn’t, quite — you were simply the one worth serving. The day a larger buyer appears, that power transfers, quietly and completely. You don’t just pay more. You lose the ability to shape the terms at all. You take the price that’s left.

It happens wherever a shared resource gets a new, hungrier claimant — a scarce material, a supplier’s attention, the best space a landlord has. The comfortable spot was never a right. It was a ranking, and rankings change.

The humbling part is how little anyone in the picture can see of it. The gamer sees a higher price tag. The console maker sees a supplier who won’t commit. Neither is in the room where the real decision — who the world’s chip factories serve — gets made. The whole thing turns on a demand that dwarfs them both, and the most powerful company in gaming has about as much say in it as you do.

03 · Lab · your turn

Take what's left

Rehearse being a price-taker: as a bigger buyer bids up a shared supply, you can only choose where the unavoidable cost lands, never remove it.

04 · Hope · carry this

Every chip shortage before this one ended the same way — the high price is exactly what pulls new factories into being, and those factories are already going up. Scarcity is loud, but it tends to fund its own cure.