Tech Firms Blame AI for Record Device and Console Price Rises

Some of the world's most popular consumer electronics are getting more expensive, and the companies behind them are placing the blame squarely on artificial intelligence. Gaming consoles, portable PCs and smartphones are all seeing significant price hikes in 2026, as AI-driven demand for advanced chips and components pushes manufacturing costs to new highs.

Who Is Raising Prices

Microsoft has raised prices on its Xbox consoles, citing higher component costs. Nintendo's new Switch 2 launched at a higher price point than its predecessor, with similar justifications offered. Valve, maker of the popular Steam gaming platform, raised the price of its Steam Deck portable gaming device to £879, noting that rising component costs reflect a broader industry trend. Apple has also implemented price increases of nearly 20% on some of its product lines, with the company saying it had "never seen a component price increase this much, this quickly."

The AI Connection

Industry analysts point to the explosive growth in AI computing infrastructure as a key driver of component price inflation. Data centres building out AI capacity are consuming unprecedented quantities of advanced semiconductors, memory chips, and high-bandwidth networking components. This demand surge has left less supply available for consumer electronics manufacturers, who must now pay more for the same components.

• Xbox consoles: price raised citing AI-driven component costs
• Nintendo Switch 2: launched at higher price than predecessor
• Valve Steam Deck: now priced at £879
• Apple raised prices on some lines by nearly 20%

What This Means for Consumers

For consumers, the trend means that the technology they rely on is becoming steadily more expensive. Gaming enthusiasts face higher barriers to entry for new platforms, while smartphone upgrades cost significantly more than just a few years ago. The trend also puts pressure on the broader consumer electronics market, as buyers reconsider upgrades and manufacturers look for ways to manage costs without sacrificing quality.

Tech industry observers note that this may not be a short-term phenomenon. As long as AI infrastructure buildout continues at its current pace, the competition for advanced components between AI operators and consumer electronics manufacturers is likely to remain intense.