How exploding demand for AI chips pushes prices of old gaming consoles

For years, consumers could count on a familiar trend in the technology market: as devices aged, their prices steadily fell. That pattern is now reversing, with companies raising prices on products that have been on the market for years as soaring demand for AI hardware drives up component costs.

Among the latest manufacturers to increase prices are Apple and Microsoft, both citing higher costs for key components needed to manufacture consumer electronics, as tech magazines point out.

Industry analysts say the surge is being fueled by the rapid expansion of artificial intelligence infrastructure. AI companies are building massive data centers packed with high-performance servers, creating unprecedented demand for semiconductors and memory chips. As a result, supply has struggled to keep pace, pushing component prices sharply higher.

One of the biggest price increases has affected random access memory (RAM), a once inexpensive component found in nearly every electronic device. The sharp rise in memory prices has prompted some industry observers to dub the phenomenon "Ramageddon."

Apple recently increased prices for several of its tablets and laptops by nearly 20%. Shortly afterward, Microsoft announced another round of price hikes for its five-year-old Xbox Series S and Xbox Series X consoles, with prices rising by at least $100 starting in August.

The latest increase marks Microsoft's third price adjustment in just over a year, leaving the consoles 30% to 40% more expensive than they were at the same time last year.

The announcements also weighed on investor sentiment, with Apple's share price falling following news of the higher prices.

While flagship smartphones such as the iPhone have so far avoided major price increases, experts note that premium manufacturers including Apple and Samsung Electronics are better positioned than many competitors to absorb higher component costs.

Besides these two major brands, the impact is being felt across the broader technology industry. Nintendo has announced a global price increase for the Switch 2 beginning in September, while Valve Corporation recently launched its new Steam Machine gaming PC at a higher-than-expected price after citing rising manufacturing costs.

Fingers pointed at AI

Technology companies largely attribute the increases to the explosive growth of artificial intelligence.

Apple described the current situation as an "unprecedented challenge" for the memory chip industry, a comment many analysts interpreted as evidence that the enormous investment in AI infrastructure is beginning to affect consumer electronics pricing.

Developers of generative AI are racing to build increasingly powerful data centers capable of handling demanding AI workloads. These facilities require vast quantities of the same semiconductors and memory chips used in laptops, smartphones, gaming consoles, and other consumer devices.

RAM prices have more than doubled since October 2025, reflecting the growing imbalance between supply and demand.

"The race to build out AI data centres is resulting in a swift and significant increase in demand that chip makers are rushing to meet," Danni Hewson, head of financial analysis at investment firm AJ Bell, told the BBC.

According to Hewson, the surge in demand has also enabled major semiconductor manufacturers such as TSMC to raise prices as customers compete for limited production capacity.

By Nazrin Sadigova