Abstract:
Epic Games CEO Tim Sweeney warned that the investment boom brought about by the construction of AI systems and data centers is squeezing hardware supply, and the gaming industry is therefore bearing higher memory and storage costs. He believes that this round of tight supply will not end in the short term.
Swinney described it as an "unexpected and severe shock" in an interview in the latest issue of Edge magazine. He said that based on the judgment that AI will profoundly change the economy, all parties have invested heavily in the construction of AI systems and data centers, but the gaming industry is at a disadvantage in the competition for hardware.
According to Sweeney, memory and storage product prices have quadrupled and won't necessarily stop there. He predicts that related supply problems may last for up to three years. In addition to rising hardware prices, the gaming industry is also currently facing pressures such as layoffs, rising development budgets, and rising product prices.
"Edge" called the current situation "Crash 2.0" and invited Sweeney, former PlayStation executive Sean Lydon, Tencent's Amir Satwat and Playable Worlds' Raf Koster to discuss industry issues. Unlike the market crisis in 1983 caused by factors such as low-quality software and too many console choices, today's large-scale commercial games mainly face the problems of too long development cycles and high costs.
Leyden proposed that large studios should adjust their revenue expectations to accept earning $50 million for a game instead of targeting $500 million, and control the size of their teams accordingly. Interviewees such as Satwatt also admitted that the industry had previously had too high expectations for using AI tools to replace large teams, but this vision is now increasingly difficult to realize.
When talking about other technology crazes, Sweeney also mentioned NFTs and said that participants "all suffered losses" in the process. Although "Fortnite" continues to operate, Epic has launched multiple rounds of layoffs in recent years, citing reduced revenue.
Swinney believes that expanding local manufacturing may be a way to alleviate the problem, not only reducing dependence on suppliers such as Nvidia, but also helping to increase the autonomy of technology supply. However, he also admitted that this idea contains elements of wishful thinking, and pointed out that physical construction cannot follow Moore's Law as fast as chip performance.
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