We are not ready for how much worse video game prices will spiral out of control thanks to AI - Polygon

AI’s chip race is about to hit gamers where it hurts: their wallets. OpenAI’s push to power its massive, state-sanctioned Stargate project has intensified a semiconductor squeeze that was already driving up costs across tech. The result could be higher prices for consoles, PC components, and the broader gaming ecosystem.

What’s happening

• OpenAI signed deals with two top memory chip makers to fuel Stargate, reportedly securing around 40% of global semiconductor supply.
• Tariffs and existing supply constraints were already pressuring prices. Every major console maker has raised hardware prices this year, in some cases more than once.
• PC gamers are feeling it too, with GPUs and RAM demand spiking costs.

Nintendo’s immediate pain

• Investor jitters knocked $14 billion off Nintendo’s valuation as the chip crunch threatens margins.
• Multiple Switch 2 components are seeing price hikes between 8% and 41%—a big hit for a console with tight profitability.
• The dilemma: who absorbs those costs?

How Nintendo could respond

• Treat Switch 2 as a loss-leader and make up revenue through subscriptions, accessories, and digital sales.
• Raise the sticker price again, Microsoft-style—though that risks killing momentum and looks tough against a cheaper, more powerful PS5 with a larger library.

Microsoft and Valve’s calculus

• Microsoft has hinted its next Xbox will be a pricey, high-end machine.
• Valve could benefit if it streamlines PC gaming with a compact box, but actually building the hardware at scale is the first hurdle. Notably, it still hasn’t announced a price.

PlayStation timing may be a wild card

• The PlayStation 6’s internals were decided years ago, and both current consoles are in that familiar pre-new-hardware software lull.
• If the next gen is still a ways off, the chip picture could improve. If not, PS6 pricing could make those 2020 PS5 scalper prices look almost reasonable by comparison.

Bottom line

• Unless the semiconductor landscape loosens up, expect higher upfront hardware prices, more aggressive ecosystem monetization, or both.
• On the bright side—once the United States builds out that sweeping AI infrastructure with OpenAI, maybe ChatGPT will fix everything.

Source: https://www.polygon.com/open-ai-chips-semiconductor-deal-shortage-ps6-switch-2-prices-ram/