AI CHIP DEMAND PUSHES GAMING CONSOLE PRICES UP

The PS5 saw a £90 price increase in March, while Xbox Series S and X models are jumping by at least £75. Historically, aging consoles received price cuts to maintain sales momentum. That calculus has shifted. AI infrastructure buildout is consuming vast quantities of semiconductor production and memory chips. This competition for limited factory capacity and components has made it costlier for console makers to source parts, offsetting the typical economies of scale that come with mature hardware. Memory scarcity particularly impacts console production. As datacenters prioritize chip orders for AI systems, gaming hardware faces allocation constraints that keep component costs elevated. Console makers are passing these expenses directly to consumers through higher retail prices. The pricing strategy reflects a broader market reality: demand for AI chips has fundamentally altered semiconductor economics. For console makers, maintaining margins now requires higher consumer prices, even as their products enter mid-life cycles traditionally marked by aggressive discounting.