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Two of gaming’s biggest names told investors on Friday that the AI gold rush is now hitting their wallets. Sony and Nintendo each warned that surging memory chip prices, fuelled by data centre buildouts, are squeezing their console operations and forcing tough choices on pricing and inventory.
Global memory chip prices are rising fast. Prices nearly doubled in the first quarter and could climb another 63% this quarter. The surge comes from strong demand for AI infrastructure, which is consuming large volumes of advanced memory chips. This pressure is now spreading into the gaming industry, including consoles like the PlayStation 5.
In the gaming market, Nintendo faces growing cost pressure. The company expects higher component costs and tariffs to add about 100 billion yen ($638 million) this fiscal year. As a result, it plans to raise prices for the Switch 2 by 10,000 yen in Japan and $50 in the U.S. This move reflects a broader shift in the industry, where chip shortages and trade costs are forcing companies to adjust hardware pricing more often.
Sony has secured its memory supply for this year. This gives some stability to PlayStation 5 production. However, PS5 sales still depend on how much memory Sony can buy at workable prices. If memory costs stay high, console availability and pricing could still shift. The gaming industry now sits closely tied to AI-driven demand in the semiconductor market.
The squeeze comes from a single source: artificial intelligence data centres are vacuuming up memory faster than producers can ship it. That demand has rippled outward, hitting smartphones, laptops, automobiles and now games consoles. Samsung, SK Hynix and Micron have all committed billions to expanding output, but industry experts note that a new production line typically needs at least a year before it goes live.
For Nintendo, the math is uncomfortable. The company behind Super Mario expects roughly 100 billion yen ($638 million) in additional costs this financial year, primarily from memory and tariffs. President Shuntaro Furukawa said those higher component costs, alongside currency movements, factored directly into the decision to raise Switch 2 prices.
The Japanese-language Switch 2 model will rise by 10,000 yen to 59,980 yen. The American version climbs $50 to $499.99. Furukawa told the earnings briefing that profitability after the increases should come in roughly flat versus last year.
Sony took similar action back in March, lifting the standard PS5 by $100 to $649.99 in the U.S.
Casual Players, Tight Budgets
The risk for Nintendo lies in its audience. The Switch 2 is barely out of the gate, and the company’s broader user base skews casual and budget-conscious, the kind of players who might pause before paying more for a console.
“Nintendo is now under more pressure than ever to get more first-party blockbusters out this fiscal year” to boost demand for the system, said Serkan Toto, founder of the Kantan Games consultancy.
The release calendar is a concern. Analysts view Nintendo’s pipeline as on the lean side, though “Pokemon Pokopia” has performed well and “Star Fox” sits on the upcoming roster.
Nintendo also raised prices on the original Switch and its online services. Its playing cards are shifting from a fixed listed price to an open price determined by individual retailers. The company projects 16.5 million Switch 2 units sold this year, down from 19.9 million last year, alongside 60 million software units.
Sony Eyes a GTA VI Tailwind
Both companies have watched their share prices wobble as investors weigh AI-driven supply disruption and the war involving Iran against electronic manufacturers’ margins. Sony is planning to spend up to 500 billion yen on share buybacks and forecasts lower sales but higher profits at its gaming division this fiscal year.
CEO Hiroki Totoki said Sony has secured memory supply for this financial year, but warned that prices look likely to stay elevated into next year. The company is hunting for cost reductions in areas beyond memory.
PS5 hardware shipments are tied directly to how much memory Sony can lock in at workable prices, with hardware profitability projected to land near last year’s level. Now in its sixth year on shelves, the PS5 forecast also bakes in spending on Sony’s next-generation platform.
One bright spot looms in November: Take-Two Interactive’s long-delayed “Grand Theft Auto VI” is scheduled to launch then, and Sony stands to benefit handsomely.
“Sony’s bottom line stands to benefit significantly from the high-margin software sales and ecosystem engagement this launch should trigger,” Amir Anvarzadeh of Asymmetric Advisors wrote in a note.
The broader picture is one where AI’s voracious appetite for memory has crossed over from a chip-industry story into something gamers feel directly at the checkout. Until new fabs come online, console makers are working with whatever memory they can get, at whatever price they can negotiate.
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