Memory Price Surge Pressures Game Makers; Nintendo, Sony

Nintendo and Sony have warned that soaring memory chip prices are raising costs across their gaming businesses, as artificial intelligence demand strains global semiconductor supply.

Memory prices doubled in the first quarter from the previous quarter and could rise by as much as 63% this quarter, driven by demand from AI data centres, according to industry forecasts. The supply shortage has spread across smartphones, laptops, automobiles and gaming hardware.

Nintendo said higher component costs, especially memory chips, alongside tariffs, would add about $638 million to expenses in the current financial year.

The company recently raised prices for its Switch 2 console. The Japanese-language version will now cost 59,980 yen, up by 10,000 yen, while the U.S. version will sell for $499.99, a $50 increase.

President Shuntaro Furukawa said the higher pricing shows the rising component costs and currency pressures.

“The very fact that Nintendo felt compelled to act suggests the rise in memory costs has become severe enough that it could no longer be absorbed internally,” Morningstar analyst Kazunori Ito said.

Sony has also increased PlayStation 5 prices. The standard PS5 model in the United States rose by $100 to $649.99 earlier this year.

Chipmakers including Samsung Electronics, SK Hynix and Micron Technology have pledged billions of dollars to expand memory production, but new manufacturing lines can take more than a year to become operational.

Analysts said Nintendo faces added risks because the Switch 2 remains early in its product cycle and its customer base is more price sensitive than rival platforms.

Sony said it had secured enough memory supply for the current year but expects prices to remain elevated next year. The company added that PS5 hardware profitability would likely stay flat as it manages component costs and invests in its next-generation gaming platform.

Investors have increasingly focused on how AI-driven supply shortages could pressure margins across the consumer electronics industry, even as companies benefit from growing demand for gaming software and digital services.