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“Honestly, it’s still getting worse” – Valve Steam Machine engineer says component prices are still rising, potentially paving the way for a price increase
A Valve engineer has warned that component prices remain on an upward trajectory even after the company's Steam Machine console launched at a higher-than-intended price, raising the prospect of further increases across gaming hardware. Speaking to Bloomberg, Yazan Aldehayyat said the ongoing memory and storage crisis, driven largely by AI datacentre demand, is continuing to worsen and that retail prices currently lag bulk supply costs by three to six months, meaning further rises are likely already in the pipeline.
The Steam Machine launched at a minimum of £879 ($1,049), a figure Valve had previously admitted was above its original target. The issue is not isolated to Valve: Microsoft has raised prices across its Xbox Series X/S range from 1st August and expects component costs to double again by autumn 2027, while Sony has repeatedly increased PS5 prices and Nintendo has announced a Switch 2 price rise from 1st September. Aldehayyat expressed hope that pricing would eventually stabilise, but acknowledged that current costs may simply become the new normal for consumer electronics.
In short
- Valve says component prices are still rising, not stabilising.
- Steam Machine already launched at £879, above Valve's target.
- Xbox, PS5 and Switch 2 have all faced recent price hikes too.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Component costs have genuinely risen due to documented AI datacentre demand creating real supply constraints. Gaming companies cannot indefinitely absorb cost increases whilst maintaining employment, investment in innovation, and shareholder value. Raising prices transparently reflects actual scarcity, and when supply eventually normalises, prices can adjust downward accordingly.
The case against
Major gaming companies maintain substantial profit margins and could absorb rising component costs without proportionate consumer price increases. Price rises disproportionately exclude lower-income consumers from entertainment and technology. Companies often leverage supply pressures to justify profit optimisation, and historically, prices remain elevated even after component costs normalise, meaning consumers bear permanent cost increases.
Explained simply
Gaming hardware is becoming significantly more expensive because components needed to manufacture consoles have risen steeply in cost. Memory and storage prices have climbed as artificial intelligence companies demand these materials for their datacentres.
All the major console makers have been affected. Valve's newly released Steam Machine launched at £879, above the company's original target, and Microsoft, Sony and Nintendo have all raised console prices in recent months, with further increases expected to follow.
Retail prices currently lag behind manufacturing costs by several months, which means further increases are already on the way. If component costs remain elevated as currently expected, gaming hardware may remain more expensive than it was previously.