# Tim Sweeney links component shortage to AI demand, backs new factories

- URL: https://talkfuse.com/story/how-does-epic-games-ceo-tim-sweeney-reckon-we-can-fight-the-industrys-crash-2-0-by-building-more-factories/
- Published: 2026-09-03T20:24:16+00:00
- Updated: 2026-09-04T02:30:18+00:00
- Original publisher: Eurogamer
- Original article: https://www.eurogamer.net/tim-sweeney-crash-2-more-factories
- Topics: Americas, Business, Celebrity, Companies, Entertainment, Gaming

## Key points

- Sweeney likens current downturn to the 1983 industry crash
- AI data-centre demand is driving up RAM and storage prices
- He says new factories are the only real long-term fix

## Summary

Epic Games chief executive Tim Sweeney has said the games industry is experiencing its worst downturn since the 1983 "Atari shock" crash, pointing to a severe shortage of hardware components as a key driver. Speaking to Edge Magazine, he argued that massive global investment in AI systems and data centres has allowed AI firms to outbid the entertainment industry for components such as RAM and storage, and that building substantial new manufacturing capacity is the only realistic way to resolve the shortfall. His comments add a proposed fix to a crisis that is compounding an industry already reeling from mass layoffs at major publishers including Sony, Microsoft, EA, Ubisoft and Take-Two, as well as at Epic itself.

Sweeney said RAM and storage prices are quadrupling and warned of a "continual supply crisis" for gaming-relevant hardware likely to last around three years, though he expressed confidence that new factories would eventually be built to meet demand. It remains unclear whether Epic would itself invest in manufacturing capacity. The remarks follow other recent comments from Sweeney, including his prediction that Roblox will "grow and eat gaming", and come against a backdrop of Epic laying off 1,000 staff in March amid falling Fortnite engagement and declining console hardware sales.

## Coverage

- [Eurogamer: Tim Sweeney links component shortage to AI demand, backs new factories](https://www.eurogamer.net/tim-sweeney-crash-2-more-factories)
- [Polygon: ‘Worst Crash We’ve Seen Since the 1980s,’ Warns Epic Games CEO](https://www.polygon.com/video-game-industry-crash-tim-sweeney-epic-games/)

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Summarised by TalkFuse (https://talkfuse.com/). Quote the original publisher for the reporting and link this page for the summary and discussion.