Memory chip shortages fuelled by AI expansion are disrupting the gaming sector, with Nintendo and Sony facing higher costs and growing supply pressures.
Nintendo and Sony are facing mounting pressure on their gaming businesses as soaring memory chip prices—driven by artificial intelligence demand—tighten semiconductor supply worldwide.
The rapid expansion of AI data centres has sharply increased demand for memory components, diverting supply away from consumer electronics. Memory chip prices doubled in the first quarter compared with the previous quarter and are expected to rise by up to 63% in the current quarter. The shortage is affecting multiple sectors, including gaming consoles, smartphones, laptops, and automotive electronics, underscoring how AI workloads are reshaping chip allocation priorities.
Major memory suppliers such as Samsung Electronics, SK Hynix, and Micron Technology have committed billions of dollars to expand production capacity. However, industry experts note that building new fabrication lines typically takes at least a year, suggesting memory shortages and elevated pricing could persist in the near term.
For Nintendo, rising memory costs combined with tariffs are expected to increase expenses by about ¥100 billion ($638 million) this financial year. President Shuntaro Furukawa said the cost pressures, along with currency fluctuations, prompted the company to raise prices for its upcoming Switch 2 console. The Japanese-language model will increase by ¥10,000 to ¥59,980, while the US version will retail at $499.99, $50 higher than previously planned. Despite these adjustments, Nintendo expects profitability to remain broadly stable.
Sony has taken similar action, increasing the price of the PlayStation 5 earlier this year, with the standard US model rising by $100 to $649.99.
Analysts caution that Nintendo’s price-sensitive user base could make price hikes challenging during the early lifecycle of a new console. Overall, the developments highlight how the AI boom is intensifying competition for memory chips, forcing gaming companies to revise pricing strategies to manage sustained semiconductor cost pressures.
