Gamers’ worst nightmares about artificial intelligence have come true

Gaming community I was dismayed last week when Seamus Blakely, the original creator of the Xbox, claimed that the console was in discontinuation mode in an interview with Gamesbeat.

However, if you read the interview or his comments on Bluesky, you’ll realize that he meant that something at the core of Xbox looks like on: The console he built in “Ordeal”. Blakely speculated that Asha Sharma’s move in February from AI executive to executive vice president and CEO of Microsoft Gaming means the product is in “palliative care.”

Xbox is no It closed, but many were quick to believe the headlines, as there is a dark cloud over the industry at the moment. What happened?

While gaming has seen an unprecedented rise during the pandemic, artificial intelligence has crept in behind it. The spread of AI in the gaming industry is already accelerating job losses and reducing the cost of work for developers at studios that are now being scrutinized by anti-AI gamers. Data centers have pulled random access memory (RAM) from the industry, leading to a global memory shortage. This has driven up the hardware costs required for consoles, halted releases, and made building PCs at home – once a rite of passage for entry-level gamers – a luxury.

In December, Valve announced it would discontinue the 256GB Steam Deck LCD model, which was released in 2022, and the 2023 upgrade is all but gone. This is the first discontinuation of a major console before a worthwhile upgrade is released; Valve’s Steam Machine, a box six times more powerful than the Steam Deck, is supposed to be released this year, but its exact timing and cost are still unknown. Meanwhile, Xbox and PS5 prices have risen. According to Bloomberg, Sony has yet to confirm or deny that the PS5’s successor, which was scheduled to launch in late 2027, has been delayed by another year. After Nintendo narrowly avoided new tariffs on the launch of the Switch 2 in 2025, over which it is now suing the US government, it does not rule out a price increase.

Six years ago, while the world was on lockdown, the gaming industry was booming.

Animal Crossing: New Horizons It sold 13.4 million units within just six weeks of its launch date in March 2020, the largest number of digital units for a console game ever sold in a single month. In the same year, global gaming revenues increased by 23 percent, and millions who had not previously classified themselves as gamers chose consoles and played PCs.

When the Playstation 5 launched in November 2020, seven years after its predecessor, it seemed like a promise that the gaming industry would be okay, even as other industries struggled to adapt to the pandemic. In July of 2021, Valve unveiled the Steam Deck, a portable console that would make it possible to play Steam games anywhere. Pre-orders sold out within hours.

Meanwhile, YouTubers and Twitch streamers have soared in popularity, with millions at home watching gamer streams rather than other on-screen entertainment. The gaming industry’s power centers are beginning to swell. Microsoft acquired Activision Blizzard and ZeniMax Media. Sony responded by acquiring Bungie in 2022 while investing $1.45 billion in Epic Games. Job postings in gaming are up 40 percent during the pandemic.

But the advent of artificial intelligence led to a RAM shortage now referred to as RAM, which brought all this progress to a screeching halt.

The rapid rise of artificial intelligence has turned every corner of the technology industry upside down. Nearly a third of adults and most teens in the United States use artificial intelligence on a daily basis, according to Pew Research Center research. Data centers in the United States have doubled since 2022, pushing electricity costs up to 267% higher than they were five years ago for households near those warehouses, according to Bloomberg. Reports indicate that the United States accounts for more than half of the “hyperscale facilities,” centers specifically designed for artificial intelligence, many of which are multibillion-dollar investments.