Tim Sweeney says RAM and storage prices are quadrupling as AI outbids games

Epic Games chief executive Tim Sweeney says the games industry is in its worst crash since the 1980s, and puts a large share of the blame on a component shortage that has nothing to do with games. Speaking to Edge magazine for a feature in issue 428, Sweeney said the prices of RAM and storage are quadrupling, and that he expects a continual supply crisis for gaming-relevant hardware for the next three years.

The cause, as he describes it, is an unprecedented wave of investment in AI systems and data centres. That buildout can outbid the entire entertainment industry for the same memory and storage parts, and games are getting the short end. Sweeney's proposed fix is not a clever one: build more factories. He expects that to happen, but factories take years.

Edge contributing editor Alex Spencer put the question to nine people for the piece, under the banner "Crash 2.0". GamesIndustry.biz has a summary of the responses. Sweeney's own is blunt: he has made the same argument publicly, that DRAM capacity is being diverted to data centres whose operators simply pay more.

The cost curve nobody bent

The component squeeze landed on an industry already carrying budgets it cannot service. Sweeney puts current AAA budgets between $250 million and $400 million. Playable Worlds chief executive Raph Koster has been measuring the same curve for two decades: he first argued in 2005 that cost would kill the industry, repeated the analysis in 2017 across 250 releases spanning thirty years, and got the same answer both times — development cost rises roughly tenfold per decade. Inflation-adjusted, that is about $1 million for a console or PC AAA title in the mid-1990s, $10 million in 2005, and $100 million in 2015.

Former PlayStation boss Shawn Layden's answer is to stop treating a $50 million return as a failure and build cost structures where it is a success. He is scathing about scale for its own sake, calling a world that takes 45 minutes to cross a party trick if nothing in the story needs it.

The 50-to-20 question

The part most likely to affect a small team is Amir Satvat's. The former Tencent business development director says the interesting shift is not the solo developer but the 50-to-60 person team becoming 20, and the 400-person team becoming 100 — and that a lot of studios are attempting it because they now have AI tooling. His caution is worth reading twice: some firms cut staff on the assumption the tools would cover the gap, found they had cut too deep, and are hiring back. Satvat says the damage is concentrated in North America, northern and western Europe, and that traditional AAA studios there have taken the worst of it.

For anyone specifying a workstation this quarter, the practical consequence is immediate. Memory and storage are the two line items on a build sheet that were reliably cheap, and they are the two that are moving. If you were planning to spec a new build machine or expand a render box in 2027, the case for buying it now is stronger than it was a month ago.