Elias Virtanen
July 21, 2026
15 min read
Valve’s Steam Machine went on sale June 29 at $1,049, roughly $300 to $350 more than the company had reportedly targeted before a global memory shortage forced its hand. That price tag was not an isolated event. Since the start of 2026, Sony, Microsoft, Nintendo, MSI, and Asus have each raised prices on gaming hardware, and the common thread running through every increase is the same: a memory chip shortage that traces back to 2025 and has only tightened as AI data centers buy up the world’s DRAM and NAND supply.
Analysts do not expect quick relief. Kearney’s 2026 market analysis puts a full recovery as far out as 2030, and Micron’s own capacity additions will not ship meaningful volume until mid-2027 at the earliest. What started as a data center supply story is now a five-platform pricing story across Steam Machine, PlayStation, Xbox, Switch 2, and the handheld PC market, and it says as much about the AI buildout as it does about gaming.
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What’s Driving the Global Memory Shortage in 2026
The shortage did not begin with gaming hardware at all. It began in the data center, where AI accelerators need enormous amounts of high-bandwidth memory (HBM) to feed training and inference workloads. Samsung, SK Hynix, and Micron, the three companies that make almost all of the world’s DRAM, have been shifting fab capacity away from ordinary consumer DDR5 and NAND flash toward HBM production for Nvidia and other AI chipmakers. Less capacity for standard memory means less supply for every device that needs RAM, from laptops to game consoles.
The scale of the demand shift is difficult to overstate. Industry estimates documented in a running account of the 2025-present global memory supply shortage suggest OpenAI’s Stargate infrastructure project alone could absorb close to 40% of global DRAM output at peak build-out, requiring roughly 900,000 wafers a month. Samsung responded by redirecting 1c DRAM capacity, targeting around 60,000 wafers per month specifically for HBM4 production by the fall of 2025. That is capacity that used to make the memory chips inside game consoles and PCs.
The price effect has been severe and fast. DRAM prices climbed roughly 170% over the full year of 2025, according to multiple industry trackers, and NAND flash contract prices jumped more than 60% in a single month in November 2025. Tom’s Hardware reported that even as ordinary consumers start hitting an affordability wall, AI-driven demand has kept DRAM and NAND prices climbing through the third quarter of 2026. Consumer pullback has not been enough to slow the market.
Every device that ships with RAM or flash storage inherits some piece of that cost increase. Gaming hardware is simply where the effect is most visible, because consoles and handhelds are sold at fixed price points that consumers notice the moment they move.
Steam Machine’s $1,049 Price Tag Tells the Story
Valve’s Steam Machine is the clearest single example of how the shortage reshaped a product before it even reached buyers. The compact SteamOS living-room PC launched at $1,049 for the 512GB configuration and $1,349 for 2TB, with a Steam Controller bundle adding $79 to either tier. Reporting on the launch pricing, confirmed directly by Engadget, noted the device shipped without a controller by default, a detail that itself reflects how tightly Valve is managing bill-of-materials costs.
What makes the Steam Machine notable is not just the final price. It is the gap between that price and what Valve had reportedly been planning before the shortage hit. Industry reporting around the launch pointed to an original internal target closer to $700 to $800, a roughly 30% swing driven almost entirely by DDR5 and NVMe storage costs. Valve also delayed the launch outright while it worked out sourcing, and Steam Frame, the company’s VR headset, still has no confirmed price or ship date for the same reason.
Valve is a private company that does not answer to shareholders, which makes its pricing decisions a useful signal. If a company with no quarterly earnings call to please is passing this much cost through to buyers, the underlying input costs are real, not a margin grab.
Consoles Feel the Squeeze: PS5, Xbox and Switch 2
The console makers followed the same path, just on a bigger stage. Sony has already pushed the PlayStation 5 to $649, its second price increase, with the hike explicitly tied to the same DRAM run-up affecting Valve. The PS5 Pro remains priced at $699.99, and Sony has not announced a further increase there as of publication.
Microsoft’s move is larger in percentage terms. The company has confirmed the Xbox Series X will rise to $799.99 on August 1, up from a $499.99 launch price, while the Xbox Series S holds at $299.99 for now. Independent reporting on the broader memory crisis, including coverage that traced Micron’s earnings, separately noted Xbox pricing had climbed “from $499 toward $799” as memory costs rose, which lines up with Microsoft’s own confirmed number almost exactly.
Nintendo is the most recent to confirm an increase. The Switch 2 will jump to $499.99 on September 1, the console’s first price change since launch. Because Nintendo carries a large, freshly launched installed base, the increase affects a wider pool of prospective buyers than a mid-cycle console hike would.
Put together, three of the four major console platforms have now raised prices in 2026 for the same underlying reason. That kind of alignment across competing companies, none of which coordinate pricing with each other, is itself evidence that the input cost story is real rather than opportunistic.
Handheld Gaming PCs Take the Hardest Hit
If consoles absorbed a painful hit, handheld gaming PCs absorbed a worse one. Because handhelds are built on PC components rather than semi-custom console silicon, they are more directly exposed to spot and contract DRAM pricing. Reporting on handheld pricing in 2026 put the MSI Claw at $1,799 and the ROG Ally X20 nearing the $2,000 mark, prices that would have sounded like flagship laptop territory just two years earlier.
The math is straightforward once you isolate the memory line item. A single 64GB DDR5 desktop kit that sold for around $195 in 2025 has, by some retailer tracking cited in coverage of the crisis, climbed toward $788. Handhelds typically ship with 16GB to 32GB of soldered LPDDR5X plus fast NVMe storage, both of which come from the same squeezed supply chain, so manufacturers cannot simply swap in a cheaper component the way a desktop builder might.
Smaller handheld makers without Valve’s, Microsoft’s, or Sony’s purchasing leverage are in the toughest spot of all. Without long-term supply contracts locking in volume, they are more exposed to whatever the spot market charges in a given quarter, which raises the risk of thinner margins, delayed refreshes, or lower-RAM variants that trade capability for a friendlier price.
The Memory Market, by the Numbers
The gaming headlines are downstream of a much larger semiconductor story. The table below pulls together the figures that explain why memory got this expensive, this fast.
| Metric | Figure | Source / Period |
|---|---|---|
| DRAM price increase | ~170% over 2025 | Industry trackers, full-year 2025 |
| NAND contract price jump | 60%+ month over month | November 2025 |
| Micron fiscal Q3 2026 revenue growth | +345.7% year over year, to $41.46B | Micron earnings, reported via Business Insider |
| Micron Cloud Memory segment revenue | $13.77B | Micron fiscal Q3 2026 |
| Memory share of PC bill of materials | 35%, up from 15-18% | HP, Q1 2026 |
| Estimated OpenAI Stargate DRAM demand | Up to ~40% of global output | Industry estimates, October 2025 |
| Forecast PC market decline, 2026 | 10-11% | Gartner / IDC |
| Forecast smartphone market decline, 2026 | 8-9% | Gartner / IDC |
| New fab capacity meaningfully easing supply | Not before mid-2027 | Micron capacity guidance |
| Analyst estimate for shortage resolution | As late as 2030 | Kearney, 2026 analysis |
Two rows stand out. HP’s disclosure that memory now makes up 35% of a PC’s bill of materials, roughly double where it sat a quarter earlier, shows how quickly the cost structure moved. And the Gartner and IDC forecasts for double-digit declines in PC and phone shipments show this is not just a gaming story. It is a consumer electronics story that happens to be landing hardest on gaming hardware first, because gaming devices carry more memory and faster storage than an average laptop or phone.
Why Samsung, SK Hynix and Micron Chose AI Over Consumers
None of this is a mystery once you look at where the margin is. HBM sold into AI accelerators commands a far higher price per wafer than commodity DDR5 sold into a game console or a laptop. When Samsung, SK Hynix, and Micron have to choose where to point a finite number of fabs, the economics point toward Nvidia, AMD, and the hyperscalers building AI data centers, not toward Valve or Sony.
Micron has reinforced that shift by locking in long-term commitments. The company has signed roughly 16 companies into five-year supply contracts, largely serving AI and cloud customers, which further reduces the pool of memory available to spot-market buyers like console and handheld makers that do not have similar long-term deals in place. Samsung, for its part, reportedly paused taking new DDR5 orders at one point in 2025 simply to catch up on existing commitments.
This is a rational business decision for the memory makers even if it is an unwelcome one for gamers. A wafer allocated to HBM4 for a data center customer is worth substantially more than the same wafer allocated to a DDR5 module bound for a game console, and public companies answer to that math every quarter.
Micron has started building new capacity in response to both the shortage and the profit opportunity it created. The company broke ground in July 2026 on a new fab carrying a reported price tag of roughly $9.3 billion, with production not expected until around the third quarter of 2028. That timeline alone explains why nobody serious is predicting a quick fix.
Micron’s Earnings Show Where the Money Is Going
Micron’s own numbers make the clearest case for how lucrative the AI side of the memory business has become. The company’s fiscal third-quarter 2026 revenue jumped 345.7% year over year to $41.46 billion, with its Cloud Memory segment alone bringing in $13.77 billion. Those figures come from Micron’s reported earnings, as detailed in Business Insider’s coverage of the AI-driven memory squeeze.
Growth of that size does not happen by continuing to prioritize the same product mix as before. It happens by reallocating capacity toward the highest-margin buyer, which in 2026 is unambiguously the AI data center market. Reporting on Micron’s earnings call also noted that current supply is only meeting somewhere between 50% and two-thirds of demand from its largest customers, a shortfall that trickles down to every smaller buyer further down the priority list, including the console and PC makers stocking shelves for the 2026 holiday season.
For gamers, the takeaway is blunt: the companies that make the chips inside a Steam Machine or a PS5 are currently more profitable selling to Nvidia and the cloud providers than they are selling to Sony or Valve, and profit-seeking behavior does not reverse itself just because a game console maker would like cheaper parts.
How the 2026 Memory Shortage Compares to Past Shortages
Gamers have lived through hardware shortages before, but the 2026 memory crunch differs from both of the last two in an important way: this time the pressure is coming from a genuinely new
The 2017-2018 DRAM Price Run-Up
Memory prices spiked hard in 2017 and 2018 as well, driven by a mix of tight fab capacity and, later, regulatory scrutiny into whether the three big memory makers had coordinated pricing. That cycle eased within roughly two years as new fabs came online and smartphone demand growth slowed. It was primarily a supply-discipline story.
The 2020-2021 GPU Shortage
The more recent comparison gamers remember is the 2020-2021 graphics card shortage, driven by a collision of COVID-era supply chain disruption, crypto mining demand, and scalper bots. That shortage was painful but resolved once crypto demand collapsed and chip supply normalized, inside of about two years.
The 2026 memory shortage is structurally different because AI infrastructure spending shows no sign of slowing the way crypto mining eventually did. Kearney’s forecast of a shortage lasting until 2030 reflects that difference. Data center memory demand is being built into multi-year capital plans at companies like Microsoft, Google, Amazon, and Meta, not driven by a speculative asset price that can crash overnight.
Valve’s own history adds a layer of irony here. The original Steam Machine initiative, announced in 2013 and launched through hardware partners starting in 2015, failed commercially for almost the opposite reason: underpowered GPUs, a fragmented mix of Linux builds instead of one unified SteamOS, and prices in the $500 to $1,000 range that could not match a PS4’s performance. Valve shelved the project by 2018. The 2026 Steam Machine has the unified software and the horsepower that doomed the original. What it does not have is control over its own bill of materials.
Market Impact: PC and Smartphone Sales Forecast to Drop
The consumer electronics fallout extends well past gaming hardware, a point NPR examined when it looked at how the RAM shortage was rippling through the broader electronics industry earlier in 2026. Gartner and IDC now expect the worldwide PC market to shrink 11.3% in 2026, with the smartphone market down 5% to 15% over the same period, largely because memory costs have pushed retail prices up across nearly every device category at once[2].
Apple has already felt the market’s reaction. The company raised prices by as much as $200 across parts of its lineup in a late-June announcement, and Apple shares fell more than 6% that day, reportedly the stock’s worst single-day drop since the market turmoil of April 2025. Investors read the price increase as confirmation that even a company with Apple’s supply chain leverage could not fully absorb memory costs without passing some of them to customers.
For the gaming hardware market specifically, the read-through is that price increases already announced for Steam Machine, PS5, Xbox Series X, and Switch 2 are unlikely to be the last of 2026. Component costs that are still climbing through the third quarter, per Tom’s Hardware’s reporting, leave little room for platform holders to hold the line on price through the holiday shopping season.
Gaming Hardware Price Comparison: 2025 vs 2026
Seen side by side, the price movement across platforms shows just how broad this cycle has been. No major gaming hardware maker has been fully insulated.
| Platform | Prior Price | 2026 Price | Status |
|---|---|---|---|
| Valve Steam Machine (512GB) | ~$700-800 (reported internal target) | $1,049 | Shipped June 29, 2026 |
| PlayStation 5 | $499.99 | $649 | Second price hike, in effect |
| PlayStation 5 Pro | $699.99 | $699.99 | Unchanged as of publication |
| Xbox Series X | $499.99 | $799.99 | Confirmed, effective August 1, 2026 |
| Xbox Series S | $299.99 | $299.99 | Unchanged as of publication |
| Nintendo Switch 2 | $449.99 | $499.99 | Confirmed, effective September 1, 2026 |
| MSI Claw (handheld) | Sub-$1,000 prior generation | $1,799 | Current generation pricing |
| ROG Ally X20 (handheld) | ~$999 prior generation | Nearing $2,000 | Current generation pricing |
The pattern is not subtle. Every platform that has moved has moved in the same direction, and the two exceptions on the list, the PS5 Pro and Xbox Series S, are the two lowest-attach, most budget-oriented entries in their respective lineups, exactly where a platform holder would be most reluctant to raise prices further.
When Will the RAM Shortage End
The honest answer is that nobody in the memory business is promising a fast resolution. Micron’s newly announced fab will not produce meaningful volume until roughly the third quarter of 2028. That is the single most concrete data point available, and it comes directly from the company building the capacity.
Broader forecasts vary but land in a similar range. Kearney’s 2026 analysis puts full resolution as far out as 2030. Reporting citing Synopsys’s leadership placed the shortage lasting at least through 2027. Even the more optimistic end of that range is more than a year away from publication, and every estimate assumes AI infrastructure spending does not accelerate further, which is far from guaranteed given how aggressively hyperscalers have been expanding data center budgets through 2026.
There is one modestly encouraging data point. Tom’s Hardware’s reporting on the market describes the price surge as beginning to cool on the consumer side, as buyers hit an affordability ceiling and demand softens. That is a demand-side cooling, though, not a supply-side fix, and AI-driven contract pricing has kept wholesale DRAM and NAND costs climbing regardless.
What the Memory Crisis Means for Gamers and PC Builders
For anyone shopping for gaming hardware in the second half of 2026, the practical guidance is straightforward even if it is not what buyers want to hear. Prices are more likely to rise further than to fall meaningfully before 2027, so waiting for a price drop carries real risk.
Buyers building their own PCs are the most exposed group, since DIY builds draw straight from the same spot market that has seen the sharpest swings, including that jump from roughly $195 to $788 for a 64GB DDR5 kit cited in coverage of the crisis. Buying RAM and storage in a single kit purchase rather than piecemeal, and locking in a price the moment a build is finalized, reduces exposure to further mid-quarter increases.
Console buyers have a bit more insulation, since Sony, Microsoft, and Nintendo negotiate supply at a scale individual consumers cannot match, but that insulation is exactly what is now cracking. Three of the four major consoles have already raised prices in 2026, and nothing in current reporting suggests platform holders expect to hold the line on the fourth indefinitely.
Five Predictions for Gaming Hardware Through 2027
Based on the trajectory of pricing, supply commitments, and analyst timelines gathered above, here is how the next 12 to 18 months are likely to play out.
- More price increases are coming before the end of 2026. With component costs still climbing through Q3 and no major new supply arriving before 2027, additional hikes on at least one more console SKU or handheld line are likely.
- Handheld makers will trim configurations rather than eat further cost increases. Expect more lower-RAM or reduced-storage handheld variants aimed at hitting a specific price point rather than a specific spec sheet.
- The secondary and refurbished hardware market will strengthen. As new hardware prices climb, used consoles, handhelds, and DDR5 kits are likely to hold value better than they would in a normal pricing environment.
- Meaningful supply relief will not arrive before mid-to-late 2027. Micron’s own fab timeline and Kearney’s broader 2030 estimate both point past 2026 entirely, making a 2027 holiday season the earliest realistic point for prices to soften.
- Platform holders with the deepest pockets will gain share. Sony, Microsoft, and Nintendo can absorb short-term margin pressure or lock in supply contracts in ways smaller handheld makers cannot, which should widen the competitive gap between major platforms and boutique hardware makers through 2027.
Frequently Asked Questions About the 2026 RAM Shortage
What is causing the 2026 RAM shortage?
AI data centers are consuming a growing share of the world’s DRAM and NAND production, particularly high-bandwidth memory for AI accelerators. Samsung, SK Hynix, and Micron have shifted fab capacity toward that higher-margin business, shrinking the supply available for consumer devices like game consoles, handhelds, laptops, and phones.
How much have memory prices risen in 2026?
DRAM prices rose roughly 170% over 2025, and NAND flash contract prices jumped more than 60% in a single month as recently as November 2025. Coverage of the market through the third quarter of 2026 shows prices still climbing on the wholesale side even as consumer demand starts to soften.
Which gaming platforms have raised prices because of the shortage?
The PlayStation 5 has already increased to $649. Xbox Series X is confirmed to rise to $799.99 on August 1, 2026. The Nintendo Switch 2 is confirmed to rise to $499.99 on September 1, 2026. Valve’s Steam Machine launched at $1,049, reportedly hundreds of dollars above its original internal target, and handhelds including the MSI Claw and ROG Ally X20 now carry prices near or above $1,800 to $2,000.
Is the Steam Machine price directly tied to the memory shortage?
Reporting around the Steam Machine’s launch pricing points to DRAM and NVMe storage costs as the primary reason the final $1,049 price came in well above Valve’s earlier internal target. Valve also delayed the launch and has left pricing and a release date unconfirmed for its Steam Frame VR headset for the same underlying reason.
When will the RAM shortage end?
Estimates vary. Micron’s newest fab is not expected to add meaningful supply until around the third quarter of 2028. Kearney’s 2026 analysis puts a full market recovery as far out as 2030, while other reporting has cited a timeline stretching at least through 2027. No credible forecast currently available points to a resolution before 2027.
Should I buy a gaming PC or console now, or wait for prices to drop?
Nothing in current supply or pricing data suggests a near-term drop. Since component costs were still rising as of Q3 2026 reporting and new fab capacity will not ship until 2027 at the earliest, buying sooner rather than later is the lower-risk choice for anyone who needs hardware in the next year.
Are laptops and smartphones affected by the same shortage?
Yes. Gartner and IDC forecast the global PC market to decline 10% to 11% in 2026 and the smartphone market to decline 8% to 9%, largely because memory costs have pushed retail prices higher across those categories too. Apple raised prices by as much as $200 across parts of its lineup in June 2026, citing the same underlying memory cost pressure.
Who controls the memory chip market driving this shortage?
Samsung, SK Hynix, and Micron together produce the large majority of the world’s DRAM. All three have prioritized high-bandwidth memory for AI customers over standard consumer DDR5 and NAND flash, which is the central mechanism behind the price increases hitting gaming hardware in 2026.
