Sony and Nintendo are facing increased production costs for their gaming consoles due to a surge in memory chip prices, driven by high demand from AI data centers. Memory prices are expected to rise by up to 63% this quarter, impacting the margins of these gaming giants. Sony anticipates a 6% decline in annual gaming sales to $28 billion, attributed to higher component costs and reduced PlayStation 5 sales. However, the company expects a 30% increase in gaming profits, bolstered by strong first-party software performance and the absence of previous impairment losses. Nintendo is similarly affected, with concerns over memory price impacts on gaming margins as it prepares to launch its next-generation Switch. The company faces additional challenges from rising semiconductor and logistics costs, which could lead to delays or price increases for new hardware. The AI industry's demand for high-bandwidth memory, prioritized by companies like Nvidia and AMD, is diverting supply from the consumer gaming sector, exacerbating these challenges for both Sony and Nintendo.