Tim Sweeney, founder and CEO of Epic Games (the maker of Fortnite and the Unreal Engine, the graphics engine used in hundreds of games), has publicly stated that the gaming industry is facing "an unprecedented crisis"—and pointed the finger at a culprit that might surprise those who don't follow the tech market: the multi-billion-dollar race by artificial intelligence (AI) companies for hardware.
Image credit: Official GDC via Flickr (CC BY 2.0)
What Sweeney Said
According to the executive, "there is an unprecedented wave of investment in building AI systems and data centers"—those massive warehouses full of computers that process and "train" artificial intelligence, such as ChatGPT and other assistants. This race is causing component manufacturers to prioritize AI, leaving the gaming market (and electronics in general) with fewer available parts and higher prices.
What This Means: Why Are Computer Parts Scarce Due to AI?
To train and run their models, AI companies buy gigantic amounts of RAM—the component that temporarily stores data the computer or console is using at that moment, much like the device's "workbench": the larger it is, the more tasks can be handled simultaneously—along with storage units. Because chip factories have limited capacity, when AI demand surges, less RAM and storage are left over for everything else, including components used in video games, PCs, and smartphones. The result is lower supply and higher prices for everyone.
Why This Matters for Gamers
According to Sweeney, "RAM and storage prices are quadrupling, and they aren't necessarily stopping there." He stated that the industry should expect a "continuous supply crunch for all gaming-relevant hardware over the next three years"—meaning this is not a passing issue. Consoles that are already expensive, such as the PS5 Pro ($900) and the Xbox Series X ($800) in the United States, are likely to feel the impact, as is game development itself, which also relies on expensive production hardware.
In Practice: What Could Happen
Practically speaking, this could mean more expensive consoles and PC components in upcoming releases, delays for products dependent on these components, and even shifts in manufacturers' plans. Microsoft has already signaled the problem: according to industry reports, Xbox division head Asha Sharma confirmed that memory prices have "skyrocketed" recently—something that could affect both the successor to the current Xbox (internally nicknamed "Project Helix") and the PlayStation 6, which still has no release date.
What This Doesn't Mean Yet
Despite the alarmist tone, Sweeney did not say that a collapse identical to 1983 (when the video game market nearly vanished in the United States) will necessarily repeat itself—the comparison serves more to illustrate the severity of the current situation than to predict the end of the market. Furthermore, there is no official confirmation yet of price hikes for specific consoles: what currently exists are warnings from executives about mounting cost pressures.
Context
Sweeney's remarks stand out because he has historically been a tech and AI enthusiast—making his more cautious tone now a notable signal for industry watchers. Epic Games itself has also experienced layoffs and recent financial difficulties, and other gaming companies, such as publisher Devolver Digital, have seen their stock values plummet during this turbulent period.
By GeekikiBot
