Hardware is getting more expensive. Games are becoming pricier to make and buy. Employment numbers ain\u2019t looking so hot. Also there\u2019s this lil war disrupting the economy. It\u2019s not the exact recipe we had for the original video game crash of the 1980s, but in the latest issue of Edge magazine many industry leaders admit history is going to repeat itself. Among them is Tim Sweeney, CEO of Epic Games, sounding less enthusiastic about AI than usual.<\/p>\n
\u201cIt\u2019s an unexpected, severe disruption,\u201d Sweeney tells Edge\u2019s Alex Spencer<\/a>. \u201cThere\u2019s an unprecedented wave of investment in building AI systems and data centres, based on the belief that they\u2019re going to have a really transformational role in the economy\u2026 We\u2019re getting the short end of the stick, and the prices of RAM and storage are quadrupling, and not necessarily stopping there.\u201d<\/p>\n Layoffs, spiralling budgets, increasing hardware costs: the game industry is broken. Can we fix it? In the new issue of Edge, out today, industry leaders including Tim Sweeney and Shawn Layden help us to identify what\u2019s gone wrong, and we consider proposals for a better future. pic.twitter.com\/oOefA7M9ku<\/a><\/p>\n \u2014 Edge (@edgeonline) September 3, 2026<\/a><\/p>\n<\/blockquote>\n Sweeney says that this hardware crunch is nowhere close to ending, and the supply issues will likely extend for three years at the latest. Often a cheerleader for AI\u2019s encroachment in gaming<\/a>, its generated nightmares already rearing their twisted faces in the likes of Fortnite<\/a>, Sweeney suddenly seems much colder on its overall place in the industry. After all, AI data centers getting first dibs on components is one of the main sources for this crisis. In the same conversation, he seemingly regrets ever humoring trends like NFTs<\/a>, saying \u201ceveryone was ripped off in the process.\u201d<\/p>\n Speaking with Sweeney, Shawn Layden, Tencent\u2019s Amir Satvat and Playable Worlds\u2019 Raph Koster, the Edge piece addresses what it calls the \u201cCrash 2.0.\u201d<\/a> The first crash was in 1983, triggered by a bog of low quality software, a deluge of home consoles options and confused parents. Ahead of its international debut, Nintendo designed the NES to be a consumer-friendly, quality controlled answer to the implosion<\/a>.<\/p>\n In some respects, this new crash is the opposite. Instead of cocaine blitzed weekends, major commercial releases are taking too long to make and burning through too much cash. If hardware is going to be prohibitively expensive, console and PC parts alike, players will have no choice but to be more selective, or vocally scrupulous, of their gaming habits. Layden suggests that the major studios get comfortable with only making $50 million off a game instead of $500, and tailor their teams for that reality. Most parties, including Tencent\u2019s Satvat, admit the industry was a little starry-eyed at the prospect of replacing large teams with AI tools. A scenario that seems increasingly unlikely.<\/p>\n The \u201880s crash delivered an industry better suited to survive for generations, but there\u2019s no guarantee another would produce the same results. With short-term decision making, Sony and Xbox seem especially vulnerable to a major disruption, especially ahead of next gen console launches. Nintendo, more budget friendly than the competition, may end up the king of a heap a second time.<\/p>\n Fortnite, despite its continued success and own industry disruption, has claimed to have its own money crunch in recent history, blaming reduced revenue for waves of layoffs<\/a>. Sweeney believes one option to avoid the worse would be increased domestic manufacturing, undercutting Nvidia and making international tech more autonomous. A nice thought that Sweeney simultaneously admits has elements of wishful thinking. \u201cThere\u2019s no Moore\u2019s Law for construction equipment,\u201d he says.<\/p>\n \n