Rising Cost for Gamers Likely Not Slowing Down as Micron Warns They Have No “Line of Sight” for When Memory Supply Will Catch Up to Demand
If you think the price of the Steam Machine and the recently announced price hikes for the Xbox Series consoles were bad enough, well, hold on to your butts because it’s likely going to get worse. That’s at least according to Micron, as while they expect supply to improve in the coming years, they don’t expect it to meet demand anytime soon.
As the big push for AI continues, so does the rising cost of memory and storage, components that are used in nearly every major facet of electronic devices today. From phones to laptops, PCs, gaming consoles, and massive data centers, the demand for memory and storage has been skyrocketing, so much so that we’re seeing RAM prices go up 4-6 times over their original price.
For us PC gamers, this has meant overpriced GPUs, RAM sticks, and SSDs, while console gamers, for the first time in any console generation, have seen several price hikes on the latest generation of consoles. For once, you’d have actually saved money by being an early adopter.
Video Game Price Crisis Looming Due to Rising Component Costs
If you had hoped this issue would fix itself soon, well, there’s some bad news. As revealed by Micron during their Q3 reportings, here’s what Micron CEO, president, and chairman Sanjay Mehrotra had to say about the situation:
“Our customers are recognizing that supply shortages in memory and storage will take considerable time to improve,” he said. “Even as we expect industry supply to improve gradually in 2028, we currently do not have line of sight as to when memory supply will be able to catch up with increasing demand.”
To make things clear, by “customers” they don’t mean us, everyday consumers, but rather the big corporations buying up all the memory and storage to run their AI operations and those massive data centers. It’s great news for Micron, as they’ll continue to operate and achieve record-breaking stock prices. But for those in the hobby of gaming, well, prepare for it to get a whole lot more expensive.
Further, Micron announced it had signed 16 Strategic Customer Agreements (SCAs) that come with a “very robust gross margin for Micron, well above our peak quarterly margins in any past cycle.” While Micron is only one player in the memory and storage market, we’ll likely see others, such as Samsung and SK Hynix, follow suit with these SCAs deals. Micron has locked in these deals for at least the next five years. So yeah, things aren’t going to get any better anytime soon.
Back in February, I wrote a piece about how AI did not bode well for the gaming industry, warning of further price hikes. Since then, we’ve seen prices continue to rise, and as much as I don’t want to believe it, I still don’t think this generation of consoles is done with price increases yet.
Just how much worse it’ll get is anyone’s guess, but I’m certain it’s going to push a lot of people out of the hobby at this rate.
Let’s all hope this AI bubble pops sooner, rather than later.
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