Higher prices, lower sales: Video game giants forecast the impact of the memory crunch

“RAMmageddon,” also known as “the RAMpocalypse,” or, more simply, the memory crunch, continues to plague the video game industry, pushing prices up and tamping down sales.

AI’s need for compute power is having a significant impact on consumer electronics, with video game console makers Sony, Nintendo, and Microsoft all issuing warnings about the ongoing shortages in their most recent earnings reports.

Nintendo on Friday announced that it will hike the price of the Switch 2 by $50 to $499.99 beginning in September. That decision can be interpreted as an admission that the company’s previous price hikes — last year it boosted Switch prices and ended production of its popular “Mario Kart World” Switch 2 bundle (an effective hike) — weren’t enough to counteract elevated costs amid tariffs and surging memory prices.

The “Mario Kart” maker forecast 16.5 million Switch 2 sales in the current fiscal year, ending March 2027, a 17% drop from the 19.9 million units sold this year and “unusually soft,” according to one analyst.

PlayStation maker Sony, which has hiked US console prices twice in the past 12 months, citing “pressures” and a “challenging economic environment,” also issued a warning about the ongoing crunch. Amid those price hikes, the PS5 saw a slight decline in its sales pace compared to the PS4 at the same period.

“We plan to base our PS5 hardware sales in FY 2026 on the volume of memory we can procure at reasonable prices,” Sony CFO Lin Tao said on the company’s earnings call. As a whole, Sony said it expects memory prices to impact its 2026 fiscal year by about 30 billion yen ($192 million).

Memory prices will also have an impact on future consoles, and Sony has reportedly considered delaying its next console, the PS6.

“We have not yet decided on what timing we will launch the new console, at what prices. So we would like to really observe and follow the situation,” said CEO Hiroki Totoki. “The memory prices [are] expected to be very high also in FY 2027 because there will still be a shortage in supply. So under that assumption... we will like to think... carefully what we can do.”

Microsoft — which has also repeatedly raised Xbox prices — has issued similarly vague messaging about its next-generation console plans, known as Project Helix.

“Memory costs will impact pricing, will impact availability,” Xbox CEO Asha Sharma said in an interview with Game File. “As we think about being where the world plays, we will take that into consideration.”

The RAMpocalypse has also weighed on PC players like Nvidia, which in February missed Wall Street’s expectations for its gaming division by 8%.

“We expect supply constraints to be a headwind to gaming in the first quarter of fiscal 2027 and beyond,” CFO Colette Kress said in the company’s earnings call at the time. “As much as we would love to have additional more supply, we do believe for a couple quarters, it is going to be very tight.”