Qualcomm, a key supplier of chips for devices like Windows on Arm laptops and VR headsets, is reportedly planning a double-digit percentage price increase starting September 1. This move could have implications for the cost of consumer electronics, including Valve's upcoming Steam Frame VR headset.
Details of the price adjustment emerged from a letter sent to Qualcomm customers and seen by Bloomberg. The increase is expected to add to the cost of devices that utilize Qualcomm's Snapdragon processors. Valve's Steam Frame, which is designed for game streaming and features a Snapdragon 8 Gen 3 chip, is slated for release soon. The headset employs a specialized dongle for foveated streaming, a technology that enhances visual quality in the user's direct line of sight to conserve bandwidth.
Valve has indicated that all three components of its hardware initiative—the Steam Controller, Steam Machine, and Steam Frame—are expected to launch by the end of summer. Despite the potential for increased chip costs, Valve may be able to mitigate the immediate impact. Reports suggest the company has a significant stockpile of headsets in the United States, which could be sold before the price hikes affect the final retail price. This situation echoes the challenges faced by Valve's Steam Machine, a living room gaming PC, which saw price increases prior to its launch due to memory shortages, with its most affordable model initially priced at $1,049.
Other major companies relying on Qualcomm chips, such as Meta for its Quest VR headsets, may also face higher costs. Meta is reportedly developing multiple next-generation VR devices, with more information expected at its Meta Connect event later in September.
Qualcomm attributes the price increase to exhausting other cost-saving options, including attempts to source alternative components to maintain current pricing. The company is a significant customer of TSMC, which has also announced price increases. The ongoing global memory shortage is reportedly complicating hardware acquisition for Qualcomm, impacting its ability to secure components at favorable prices and quantities, a challenge that has affected smartphone manufacturers as well.
The timing of these price increases is particularly notable as Qualcomm has made recent advancements in mobile gaming technology with chips like the X2 Elite. The growing ecosystem for Windows on Arm, which is seeing investment from companies like Nvidia, could present a competitive alternative to x86 architecture, provided that pricing remains accessible to consumers. The persistent hardware cost increases suggest that the impact of the memory crisis is far from over.