Gamers have been getting hit hard for years, thanks to Bitcoin, COVID, NFTs, and more affecting GPU price and availability, and things aren’t letting up. The rapid investment in Artificial Intelligence (AI) has pushed the tech world into a major chip shortage that has sent the price of memory chips–the stuff that makes up RAM and SSD storage–skyrocketing. It’s a problem that will eventually affect all kinds of consumer electronics.
This could mark a huge turning point for games.
The Eaters of Memory
First, let’s talk about the chip shortage itself. AI (setting aside the confusion that term causes) is everywhere, with data centers going up daily to support it. The massive data centers required to run AI applications are filled with server computers, and the component that allows anyone in the world to request an image of Sonic the Hedgehog delivering a baby while SpongeBob holds his hand is RAM.
The massive demand for RAM comes from just a few companies, including OpenAI, Google, Anthropic, Meta, and others like them. OpenAI’s Stargate project, for example, has resulted in that company alone buying up 40% of the global RAM production per month, for who knows how long.
As more people look to use AI (whether personally or in a production setting), these companies are gobbling up memory faster than the few providers out there can make it. Micron, SK Hynix, and Samsung are the biggest providers, and Micron notably just exited the consumer memory market entirely, instead deciding to focus on providing its memory to other businesses. Samsung Semiconductor recently rejected an order for RAM from Samsung Electronics for the next round of Samsung Galaxy phones, as one standout example of how intense the demand is right now. Makers like these are still supplying consumers with RAM, but only insofar as providing the memory included with pre-built computers.
The result of this massive AI expansion is that memory is becoming more difficult to buy, causing RAM prices to skyrocket, with a knock-on effect that bleeds over into anything that uses RAM–like GPUs, phones, computers, gaming consoles, and more. The effects of this shortage will be far-reaching. Three months ago, 64GB of DDR5 RAM would’ve cost somewhere between $200 and $300; it now climbs up toward $700 and $800. At that same time, 32GB of DDR5 RAM would’ve been a relatively trivial $175, and now costs around $450–as much as a modern CPU, which is traditionally one of the most expensive components of a new computer build.
Businesses would rather work with other businesses, which make large, regular orders, than sell to retail or work directly with individual customers, where sales are smaller and less predictable. It’s a choice between potentially selling one or two sticks of RAM to tens of thousands of users, or reliably selling tens of thousands of sticks to a single customer. Everything about working directly with another business is simpler and more profitable, and shows how we consumers might sometimes be more trouble than we’re worth, especially in a situation like the one we find ourselves in.
DIY PC Builders are already feeling the effects
This is going to affect gaming in ways we haven’t yet seen and may not see for another year or two, or more. But one area is already acting like a canary in the coal mine: do-it-yourself consumer PC-building.
Buying parts to put together your own PC, what was once a way to save money in PC gaming, is likely to become a luxury hobby, at least for a while, thanks to exploding costs. Boutique PC builders like Maingear and Falcon Northwest, many of which focus on gaming PCs with high-end GPUs and lots of RAM, will be affected, too, as they don’t have access to the same large contract deals that bigger companies do.
“We’ve seen over time, the DIY market has not grown significantly,” said IDC analyst Jay Chou in an interview with GameSpot. “People like the challenge and aesthetics, but overall that’s shrinking, and most people are content with buying a gaming laptop. The market has preferred the big vendors. Smaller vendors occupy an important part of the market, but were never number one.”
This will affect everyone eventually
The DIY market is one example where this effect is particularly heightened, but RAM underpins much of the high-end consumer electronics market–all those devices we mentioned before, with anything built for gaming likely to feel the effects first.
While we haven’t seen as much of an effect on GPU prices yet compared to memory, it’s all but guaranteed that they’ll get more expensive, too, thanks to the top-of-the-line GDDR memory on board. Big PC makers have an advantage here in that they have supply lines of RAM, stock that will last for some time, and the ability to negotiate prices at scale, and so we most likely won’t see a squeeze on your average pre-built PC–at least for a while.
As PC makers look to off-set the high costs of RAM, though, we’ll see the prices of higher-end specialty PCs rise the earliest.
“When you have high margins, to hold onto a reasonable price point, vendors will focus on more premium products,” Chou said. “PC makers will probably be forced to spec down a bit to hit a price point people can tolerate.”
PC makers will “probably try to pivot toward not just gaming, but creative, AI workstations,” Chou said, such as introducing workhorse PCs that use professional GPUs (expensive GPUs focused on accuracy and reliability rather than delivering maximum frames per second), like Nvidia’s Blackwell line, instead of gaming GPUs.
Those boutique PC builders–smaller shops that offer higher-end PCs aimed at gamers–are making moves of their own to keep system prices down at retail. They don’t have the same kinds of huge deals that companies like Dell or HP would have, so they’re much more vulnerable to these shifts in hardware costs. Maingear, for example, is offering the option to let you send your own RAM to them, and they’ll install it and set it up in a PC you buy from them, free of additional charge. This is an all-but-unprecedented move for a boutique PC shop.
Chou expects that we’ll probably see some consolidation of smaller, gaming-focused builders, like iBuyPower and CyberPower, as they either struggle to stay afloat or get snapped up by bigger companies. Note that those are just examples of potential companies that could be affected.
Some PC makers are beginning to offer lower-spec computers, with 8GB of RAM instead of the current standard 16GB. Nvidia is reportedly looking to reintroduce the RTX 3060 line of GPUs, which it first launched more than half a decade ago and discontinued in 2024; Nvidia has released two generations of more powerful cards since. This is currently unconfirmed, but sourced from reliable industry leakers.
Consumer behavior will change
Depending on how long this shortage lasts, the situation will only get more complicated. Some people will simply move on from gaming to more affordable hobbies. Pre-built PCs, with those often pared-down configurations, will be more affordable to those who do continue to game. And many gamers will deal with the costs by holding onto their existing configurations longer.
If players can’t afford new hardware and keep their old hardware for longer, that’s going to have an overall effect on games themselves. One big problem, according to industry analyst Mike Futter, is that the “ability to acquire or recapture players who have not yet upgraded to new consoles or a new PC is severely stunted.”
In other words, the people who want to play the games developers are making will be unable to obtain the hardware required to play them without a significant financial squeeze. Game developers have to target certain hardware, with that target varying based on the platforms they plan to release the game on and what they want to do with the game from a technical perspective.
Games meant to push the boundaries of graphical capabilities will generally target hardware they expect to see a few years down the road for the high end, with medium settings targeting a relatively common level of hardware that lets studios sell to as many customers as possible, while still retaining the look they’re going for. If consumers are holding onto their PCs longer, game developers and publishers could significantly cut down their audience by targeting those high-end specs.
“If no one can play your game because they can’t afford the necessary hardware, you’re going to have a tough time making back your development costs,” Futter explained. “It also means that developers who were targeting anticipated consumer specs for games coming three years from now may have to seriously review their plans.”
More casual players, meanwhile, may back out of gaming completely. It’s a lot easier to justify the expense of a $500 console or PC than systems climbing toward a full grand.
Those looking to play their yearly Assassin’s Creed or sports game may begin to look to cloud gaming as a solution. Grand Theft Auto 6 is of particular note here, too, as a game that has historically driven hardware sales as people use the game as an excuse to update their previous consoles. If these gamers aren’t able to afford the hardware to play one of the few games that gets them spending money, cloud gaming could be one potential solution.
Cloud gaming could be a huge boon to publishers for situations like this–a way to provide games to interested customers who can’t afford to spend the cash for an entire console system or PC, and who might not use it for anything else anyway. But if the experience is noticeably different from home gaming, then it’s all a moot point.
“Until someone can show me that cloud gaming performs indistinguishably from running a local copy, I do not expect it’s going to be the solution that AAA hopes it will be,” Futter said. “Additionally, this drives even more of a wedge between players and game ownership, which has become a huge topic of conversation thanks to the efforts of campaigns like Stop Killing Games.” This has been a dream of publishers and platforms for a long time, and one in which they’re finding mixed success even now.
An even longer console generation
“I expect that the current console generation will last longer,” Futter said. “That was a double-edged sword during the Xbox 360/PS3 era. However, we don’t have the same conditions now. Console prices are increasing, rather than decreasing via price cuts and bundling.” The length of that console generation was pushed out a few years, thanks in large part to the recession that began in 2008. By the end of the consoles’ life cycles, console manufacturers had nailed down manufacturing and released slimmed down iterations of their systems, and were frequently offering relatively inexpensive bundles to potential new customers, but the internal hardware was long past its end-of-life date in terms of power and capabilities.
Bundling has long been a way to tempt potential consumers into making the big expenditure involved in buying a console, but Futter noted a dearth of software bundles accompanying consoles in recent years. Futter recalled seeing dozens of Xbox bundles in previous generations for just a single holiday season, compared to an almost total absence now, save for exceptions like the Nintendo Switch 2 and Mario Kart World bundle, and earlier, the PlayStation 5 Spider-Man 2 bundle. These consoles are increasing in price, and profit margins are narrow enough, or possibly even sold at a loss already (a common truism in console sales for years), that their makers are unable or unwilling to flex on price even to attract a new or returning customer.
A longer console generation has advantages we’ll get into later, but Futter notes that “eventually, AAA developer ambition and publisher pressure will necessitate more powerful hardware. This is, long-term, a pretty terrible thing for an industry already in crisis.”
Adding fuel to the “longer console generation” theory is the fact that Sony is reportedly looking at monetizing the PlayStation 5’s existing install base in order to circumvent chip shortages. According to an Automaton report, Sony CFO Lin Tao said that while the company is “already prepared to gather the minimum amount of memory chips necessary to meet the year-end sales season,” it is now focused on minimizing the impact” of rising memory costs through methods such as “monetizing the installed base” and growing software and network services revenue.
The potential consumer benefits
While the chip shortage could potentially have far-reaching and long-running effects on the gaming landscape, it’s not all bad news.
Chou noted that computer maker HP has been talking with CXMT, a China-based memory company, about sourcing some memory from it. While Donald Trump’s tariffs on Chinese products are still a concern there, potentially driving up the costs to import those components, having another big name in memory manufacturing could go a long way to balancing out the shortage. As we noted before, there are just a few companies making memory, so any new players will help shift the field, increase the available resources, and lessen the pressure on all of these companies.
There’s also game development itself to think about. About 25 years ago, the pace of technological improvements in game development began to accelerate, and game budgets grew along with them. Game development cycles are much longer than they once were, particularly for AAA games leveraging high-end graphics. Developers chasing a genre trend in the early 2000s could capitalize on its popularity relatively quickly; today, a game might take five or six years to create, making that all the more impractical.
A slowdown in technological advancement could actually be a powerful boon for game developers, rather than a hindrance. Look, for example, at a game like The Last of Us, which was released at the tail end of the PlayStation 3’s lifespan. That game wouldn’t have been possible in the first days of the system’s life. It needed both the accumulated knowledge among developers that allowed them to get the most out of the PS3’s hardware, and the creation of development tools during its lifespan. If component shortages make it tough for console makers to release upgraded systems, the resulting longer hardware generations could give developers more time to push current hardware to its limits.
If developers aren’t constantly reaching (or being pushed by publishers to reach) an ever-rising high bar when it comes to tech and graphics, that could allow the people who make games to focus more on optimization for older hardware, and in the process, learn how to better exploit the existing hardware for better-looking and better-performing games. If GPU makers like Nvidia are extending the lifetime of their older cards, they’ll have a much greater impetus to continue developing new features and hardware optimizations for existing cards. The tools game developers use, too, would have to adhere to this, and this could lead to improved tools for development.
“Developers will likely have more time to perfect their pipelines with the current hardware, which will yield better results with the same hardware,” Futter said.
As game developers start to collect more of that knowledge, get better tools, and improved access to the hardware people are gaming on, that could lead to faster and less expensive development. That one is harder to say with certainty, and the continuing layoffs in the game industry certainly weigh against that as they drain institutional knowledge from studios.
All of this could, potentially, serve to make gaming more accessible–a hobby that chases experiences rather than novel technology. Even as the self-proclaimed Ray Tracing Guy, this is an exciting notion–more games designed as games and art first, and technical showpieces last.
Escaping the AI Bubble
So when do we climb out of this AI-imposed chip shortage? It’s hard to say right now. This is a multi-year process, and the shortage right now is a result of orders being made for next year. AI companies are planning new data centers with the notion that AI usage will continue adoption at the current pace. That’s not necessarily a given, though, as many have speculated that AI is a bubble that may soon burst–and many consumers view the technology negatively even now. All the uncertainty makes it tough to predict what might happen.
Chou noted that Taiwan Semiconductor Manufacturing Company (TSMC), the biggest manufacturer of CPUs, spent $50 billion to expand its capacity this year, and still believes that to be a worthwhile investment. At the very least, Chou said, he expects the shortage to continue through all of 2026 and deep into 2027. After that, it’s harder to predict.
“A lot of PC vendors have tried very hard over multiple years, they’ve tried hard to make sure their North American demand is made in factories outside of China [to spread out manufacturing],” Chou said. “Top-tier PC vendors are able to fill most of their North America volume [using components available] outside of China.”
This could mitigate the role that tariffs have played in the price increases of hardware we’ve seen over the last year, which have been further exacerbated by this artificially-induced shortage. It might not bring prices down, but it could help avoid seeing them rise even higher as a result of tariffs.
Futter is less optimistic, though.
“I don’t see this letting up until the AI bubble fully bursts,” he said.
“The issue right now is that the bubble is cornering RAM, GPU, and storage stock for AI data centers that haven’t even been built or approved yet,” Futter continued. “That means that Nvidia, AMD, Micron, and others have put a lot of eggs in the AI basket.”
When things go downhill, “[those companies’] market capitalization will tank, because shareholders will be rushing to get their investments out. If you thought the DotCom bubble bursting was bad, hold onto your butt,” Futter said.
The bursting of the AI bubble could also wreak havoc on AAA game publishers, Futter said. They’ve “sacrificed their institutional knowledge and a stable, satisfied, and secure labor force for a technology that never had a chance of fulfilling its promise.”
Investors are skittish
A big warning sign of instability in gaming caused by AI, Futter said, is the recent debut of Google’s Project Genie 3 and investors’ subsequent response of selling off a variety of game stocks, including those of GTA 6 publisher Take-Two Interactive.
Project Genie is a large language model-based generative AI aimed at letting users create and navigate around a virtual world. It currently has some severe limitations–there’s no interaction to be had, and you can only walk a character around any generated virtual space for about a minute.
Keep in mind that AI-generated videos are short for a variety of reasons; one of them is that every additional frame of AI video takes more and more energy, compute power and, yes, memory than the last, because the AI generator has to know what happened in every previous frame before to maintain any kind of coherence.
The same issue applies to these virtual worlds. That is to say that, while it’s possible that we could see AI-generated games at some future point, the costs of creating such a thing is so astronomical as to put them out of the realm of possibility for the foreseeable future, even when accounting for how quickly generative AI has advanced.
Why does this response to Project Genie matter? It shows both how uninformed and skittish investors are right now.
“This kind of investor cannibalism is a major sign of weakness,” Futter said. “You have companies who have made a point of appeasing investors by going so far in on AI that if it fails, they’ve done irreparable damage to themselves. At the same time, ‘success’ of AI in Google Genie 3 has been interpreted by investors as AAA publishers and developers having less value. It says to me that there is absolutely no winning from this over-investment. The sell-off signals a massive vulnerability in the tech as executives have promised it will be used.”
This memory shortage and the technology fueling it are both sources of great frustration and concern for PC builders, artists, gamers, and everyday people alike, not to mention the companies that supply hardware to all those consumers–and they’ll continue to be for some time. And with this being such a tumultuous moment for both the games industry and the PC industry, it’s hard to say just how it’ll shake out. All we know for sure is that these variables will steer the future for gaming for the next handful of years, at the very least.
