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Gaming-Industry Demand Remains High – But Supplies Are Still Short

Major players in the gaming sphere are pushing to the next level – but hardware shortages continue to strain the industry’s forward progress.

2020 and the pandemic’s effects launched the already swiftly growing gaming industry to new heights, as global stay-at-home orders and safety precautions drove demand and new console launches in 4Q2020 set standards for next-generation hardware requirements. Now, the industry is poised on the point of continued massive growth – but the cross-industry component shortages plaguing the supply chain are stalling this evolution and the full rollout of next-gen gaming tech to consumers.

E3, gaming’s premier annual space for game and hardware announcements, took place virtually last month, and it reinforced these trends: Game development carries on creatively across platforms in spite of the COVID gap year, but the major players still struggle to meet player demand.

From cryptocurrency developments spiking demand for powerful GPUs to surging chip requirements and the emergence of scalpers in the industry, it has become a perfect storm throwing a wrench in consumers’ ability to buy their next-gen Xbox or PlayStation or update their gaming computer. The consumer is (more than) willing to make these upgrades. But this scarcity has carried on long past the initially expected tightness during the 2020 holiday season.

So where does it go from here? Unfortunately, the answer seems to be the same as it is for the shortages across other supply chains, from automotive to other segments of consumer electronics. Connectivity and smart tech (and their corresponding hardware requirements) are becoming ubiquitous in the products and infrastructure that enable daily life, and the pandemic only exacerbated this with its new connectivity requirements. The specialized AMD chips, Zen 2 CPUs, and RDNA GPUs that make next-gen gaming consoles sheer powerhouses are no exception, and neither are the upgraded PC components that are just as needed across numerous other applications.

In spite of industry-wide struggles, working with skilled distribution partners who can navigate the electronic-component supply chain under any market condition can help ease sourcing roadblocks and keep production going. The current shortages aren’t going anywhere soon – but neither are reliable partners like Smith who can help keep players in any market moving regardless. We’ll continue supporting the gaming and other industries with dynamic procurement and supply chain strategies.

Keep an eye out here on our Market Blog and our LinkedIn page for more industry news, analysis and insights, and information about Smith’s quality program.

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