Exploding rockets and exploding hardware prices make for a lousy new normal

It was explosive news week - if you're the price of a popular-but-aging piece of consumer gaming hardware or a Jeff Bezos rocket. This week on The Kettle, Brandon Vigliarolo is joined by Reg reporters Richard Speed and Dan Robinson to talk about the Steam Deck's 40+ percent price hike and what it means for the ongoing memory and storage shortage. Sure, it's just consumer hardware, but it's the latest in a line of price hikes justified in the name of AI and geopolitics - and it could spell the beginning of a new normal for hardware prices. We couldn't ignore the standout story of late last week, though, as a Blue Origin rocket blew up spectacularly in what may be the largest space industry explosion in more than 50 years. The Blue Origin blowup is likely to delay the Artemis mission for months, if not a year or more. You can listen to The Kettle here, as well as on Spotify and Apple Music, or read the transcript of the latest episode below. It's been lightly edited for clarity. Brandon (00:02) Welcome back to another episode of the Registers Kettle podcast. And boy, do we have an explosive bit of news to talk about this week, both figuratively and literally. Not only has one particular vendor's price boom brought the AI-driven memory shortage into focus for a wider audience, but there's also a decidedly more physical detonation in Florida this week that looks like it might have imperiled NASA's moon plans. With me to discuss these stories are Reg reporters Richard Speed and Dan Robinson. Welcome to you both. Richard Speed (00:29) Hi there. Dan Robinson (00:29) Hi. Brandon (00:30) Yeah, Dan, welcome. It's your first time on. We're glad to have you here on the kettle. So let's jump right into it. So if you're not aware, game vendor and Linux gaming hardware kingpin Valve bumped the price of its flagship handheld, the Steam Deck, by more than forty percent this week. And there's no need to guess why. AI is eating up all the memory and storage that the rest of the industry uses, and global geopolitics aren't really helping either. Richard, you covered this, so walk us through what exactly Valve announced. Richard Speed (01:00) Yeah, so this is the Valve Steam Deck handheld is a popular gaming device. Brandon (01:07) Yeah, I have one myself. Richard Speed (01:10) it's a great device. Although it is getting a bit long in a tooth now, but it is a great device...or not so great at this price. Basically the price of it, there's two types. There's a 512 gigabyte version and the one terabyte version. Both have got OLED screens. Brandon (01:22) Right. The LCD version I believe is discontinued at this point, they're not manufacturing it. So these are the Steam Decks. Richard Speed (01:27) Yeah, that's correct. Yes. So it says two Steam Decks. the 512 gigabyte version, that retailed for $549 and it's now gone up to $789. The one terabyte version has now gone up to $949. And that's a lot of money for a games console. I mean, we've seen companies like Sony increase the price of the PlayStation 5. We saw the Raspberry Pi, for example, that went up. I mean, it was a hundred dollar hike, I think, for the 16 gigabyte Raspberry Pi 5. We've seen price increases from Microsoft. There's been a lot of increases. Valve didn't actually mention AI, they actually said, Steam Deck itself hasn't changed. These new prices reflect the current state of component costs and other global logistical challenges across the industry as a whole. That's what they exactly said. You'd have to think that there is a factor at play that is consuming all the memory and storage in the industry and that's AI and that's causing prices to rise. What was also interesting was in the Raspberry Pi price rise announcement, the boss there, Eben Upton, said that the company would be reversing the increases as soon as the prices settle down again. He actually said that. Whereas Valve, a little bit more coy, they just said, we'll keep you updated if anything changes. So this might be the new normal. Brandon (02:50) Yeah, which is kinda worrying, right? It's interesting because if anyone would have asked me two weeks ago if they should buy a Steam Deck, I would have told them absolutely. I have a 512 gigabyte OLED. I love it. I've had it for a couple of years now. You know, there's some brand new triple A games that it won't run well, or you've gotta scale down the graphics or install some tweaks that Steam Deck users have suggested to make things run better. So it's not plug and play necessarily. Honestly, you've gotta know your way around Linux a little bit to get the most out of it, but it's phenomenal. I love it. $789? No, absolutely not. I would not recommend someone buy this. It's an old device, there's new ones coming out from different companies. I think Intel just announced their own recently. There's a lot of other options out there and the Steam Deck raising the price by this much doesn't seem like a great move to me. it's a logical one, but a big hike for something so old. Richard Speed (03:52) As you say, you do need to be a little bit aware of tech in order to get the best out of it, but it is ultimately a consumer device. I think consumers are now starting to feel what maybe we in the IT industry have known for a few years now, that hardware prices are going up and up and up. And they're now at the sharp point of this as well. Brandon (04:00) So along with the AI-triggered memory shortages, right, that's not the only reason we're seeing these price increases in the industry, right? Valve also mentioned the global geopolitical situation was affecting its prices too. I know Dan, you wrote about this last month, about the Iran war affecting hardware prices. And I'm guessing things probably haven't eased up since then. Dan Robinson (04:36) Well, as far as we know there's still blockades and the ships aren't getting through. So what this was causing, there were reports out that it was affecting supply chains with materials and costs for servers. And apparently construction companies were seeing increases of up to 20 percent which was adding to the cost of data centers. And that's feeding through into various things as well. And as we know, the memory situation is due to AI, not so much because it's eating up all the memory, but because the chipmakers have a certain amount of capacity. And the chip types that are used in AI, in the GPUs, those make a much higher margin than memory does for ordinary PCs. So they prefer to make that. And so there just isn't enough capacity left over to supply the PC makers. That's been feeding through, as we know, [to] people who've been trying to spec up a PC. That's been feeding through into higher prices. Some of the memory prices have gone up by a ridiculous amount, they've quadrupled since last year and I believe now, I read somewhere that you're looking at well over $300 in the US for 32 gigabyte modules. Brandon (06:19) Luckily I haven't looked lately, I haven't had a need to. I'm terrified by the idea of one of my machines going bad and having to fix something. It's not a great time to be a hardware tinkerer, I feel like, right now. There's no chips being manufactured in the Middle East, so this is more of a supply chain issue. Are there particular components that come from the Middle East and Iran that that are used in construction of these things, or is it mainly just supply chain being affected by this as as the ripples expand? Dan Robinson (06:56) It affects the whole supply chain. Some things have to get routed around the Middle East, which makes it cost more to ship things. There were concerns initially that things like helium, which are involved in chip manufacturing, but that doesn't seem to have become a big issue. So the Iran issue, it's mainly the oil. It's going to run out. Brandon (07:22) At the end of the day it all comes back to that. Dan Robinson (07:27) But we're starting to see some of the effects of the memory crunch as well in rising PC prices. And as we've covered on The Register, that's starting to kill off the budget PCs. And some of these manufacturers are now, they're switching to just focusing on the higher-end systems, higher performance ones. Brandon (07:54) Right. That's paid out well for Lenovo, I think, based on a story you just wrote, right? Dan Robinson (07:59) That was last week when they announced their latest results, yes. They said that they'd managed to keep their margins up, keep their PC business profitable, and that was basically due to just selling higher-spec systems. Richard Speed (08:17) How long do you think this is going to go on for, Dan? mean, know, I mean, are we looking at 2027, 2028? I mean, I mean, this can't go on forever, surely. Or can it? Dan Robinson (08:27) Hopefully not, fingers crossed. Some of the experts, they think that this could last through to the end of next year. Brandon (08:39) That's what I've been hearing too.... I understand chip fabs have pretty long lead times, right? Like you've gotta get your orders in well in advance if you need x amount of whatever. So if they're prioritizing these higher-end chips for things like GPUs that can are gonna serve AI workloads, yeah. I mean you know, add on to that supply constraints geopolitics, and you've got just this growing backlog of, "if we've got space available two years from now, why would we give it to budget RAM and we can give it to NVIDIA for more high-end GPU graphics cards that are going to go into more data centers." So yeah, we're looking at at least probably through the end of last next year before this eases. But even then, right, like Valve said it might not adjust. I mean it didn't say it wouldn't, right? But it was very noncommittal. So I wonder if this is going to be a permanent price hike for a lot of businesses. Richard Speed (09:26) Well, it could be. Without wishing to get too much into consumer tech, Valve does have some new hardware coming out, the Steam Machine, which the actual release date and these price have yet to be officially announced. Brandon, I guess as a Steam Deck user, do you think this is going to have an impact on the price of Steam Machine, or maybe might Valve even just put it back for a while and postpone it? Brandon (09:54) I don't know, I think we've talked about this a bit off air. This could be them trying to soften the soften the blow for a really expensive Steam machine. I don't know, right? I would hope that this doesn't mean that it's gonna be through the roof. Valve has always had a really good reputation with gamers, I feel like, for being reasonable, in their pricing, in their availability, and this is kind of one of those things that I feel like there's a bit of enshittification creep, right? You can feel it. It's prices are going up because we need to keep our margins, right? As opposed to serving our customers, which I feel like was sort of where Steam came from originally. I don't know. It also makes me wonder sometimes if, like Dan, you were saying that this has had a lot of companies pivoting to higher-end equipment. But it also makes me wonder if prices go up and stay there, are we looking at a situation where, as opposed to companies saying, hey, we're gonna sell this higher-end stuff, it's more things like Chromebooks, right? Where it's this minimally specced machine that's incredibly dependent on services. It could it be that as opposed to going in the high-end PC direction where they're looking at margins, they're looking more at recurring revenue through services. I mean, that could be a possibility too. Any thoughts there, on guys? Dan Robinson (11:13) The thing about Chromebooks is, although they're tied to cloud services, people still buy them. They're not really a subscription product. Brandon (11:22) I guess that's true. I was imagining more of an evolution of that platform, right? Richard Speed (11:30) I'm thinking, Dan, you wrote a piece, I think yesterday about Qualcomm's $300 platform, which was an interesting time to pitch that. But I mean, perhaps that could be an option. Dan Robinson (11:44) Yes, it's a little awkward for them because they were aiming for a $300 price tag for these laptops, which is their new Arm-powered Snapdragon C platform. But obviously you could quite easily hit $300 just with the memory. And I see Acer has announced one system, it announced its system yesterday, but it was very cagey, and it didn't announce a price, and it's going to have maximum of 8GB of memory. That's the maximum. Brandon (12:27) That's a low spec machine right there. Dan Robinson (12:30) Yeah, I'd worry about Windows 11 running properly on that. Brandon (12:40) Richard, you're the Windows guy, what's the minimum hardware specs for Windows 11 nowadays? Richard Speed (12:41) Oh, that's a tricky one. I always say there's lies, damn lies and recommended hardware specs for Windows. I mean, you can get away with four gig. The thing is, Microsoft recently got got some flack because they did have some documentation saying you really need 16 gigs. That's quietly been shelved. And I think possibly as a result of this, this memory chaos that's going on. Dan Robinson (13:05) That was for Copilot Plus I believe, isn't it? 16 gigs. Richard Speed (13:08) Yeah, but I can imagine, and I think we've written about this before, I can easily see the AI PC requirements starting to drift downwards because 16 gigabyte machines are now, instead of being the norm are becoming the premium, that's kind of a premium machine now, whereas a year ago 16 gigs - I mean, crikey, I've got a machine down here that's got 16 gigs of RAM in it which I'm thinking that actually might be quite a canny investment now. Brandon (13:32) I've got a M1 MacBook from 2021 that I'm like, okay, 16 gigs, Apple M1 Pro. I guess I'm hanging on to this until it falls apart at the seams. Richard Speed (13:39) Yeah, definitely. Although Mac OS vs Windows 11, Mac OS has traditionally been better with memory than Windows. I've been running on a Mac Mini M1 for quite some time and that's got eight gigs. That's absolutely fine. I've used the Neo, again, eight gigs, absolutely fine. I'm not sure I'd want to run Windows 11 on eight gigs for any length of time. I just think as soon as you start to load up with apps, it's going to start to struggle. But that is very subjective. I think we're going to see how this shakes out. But as Dan says, well here you go, here's the eight-gig laptop, knock yourselves out and we'll see how it goes Brandon (14:15) I could easily see that turning into...a recurring revenue model, right? As companies are moving more toward putting everything they have into data centers and not consumer devices. Richard Speed (14:29) For sure. And I think the other interesting thing is the only - I've not seen many people come out and say, the prices will go down again, in a way that say Eben Upton of Raspberry Pi has said, we will reverse the prices when prices come down. Whereas Valve are saying, well, you know, we'll just let you know what happens when it happens. So no commitments being made. I mean, we could be looking at a new normal now. The current pain we're going through, this could be how it's going to be going forward. It's going to make it interesting for corporates, when we're purchasing new a laptop fleet, what spec you're going to buy. Brandon (15:04) More connected services. More minimal specs, I guess. You know, we'll see. We'll see. So not to completely change the subject. I mean we are still talking about booms, just not market related ones. You guys have probably seen the video of that Blue Origin fireball. That was that was pretty spectacular. I think that happened on Thursday, was that right? Richard Speed (15:07) About 9 PM Eastern time, I think it happened. Brandon (15:25) So do we know what happened, Richard? You wrote the story on that. Richard Speed (15:46) We don't know for sure exactly what happened. I mean, most of us have now seen the video and what was happening was they rolled the rocket. It's the fourth attempted - well was going to be the fourth attempted launch of a New Glenn rocket. They rolled it out on the pad, they erected it. They were doing some form of test. This might've been a static firing test. It might've been a wet dress rehearsal. Not quite sure exactly what they were doing, but it involved fueling up the rocket. Now the rocket, I think, is powered by seven B4 engines. And runs on, I think, liquid methane, I'm pretty sure. I'm sorry, I'm looking at my notes here. And they were fueling, or they'd fueled the rocket up and then something happened at the base of the rocket, and it doesn't look like it was an engine ignition from what I could see. It looks like something happened and it just caused... Brandon (16:35) The whole thing, I mean, it just kinda rippled. You could see it start at the bottom and ripple up 'cause I think one of the last shots visible of the rocket you have is the upper portion of it breaking apart. Richard Speed (16:40) I think it's important to note when we say it happened so fast, it was just suddenly "boom" and it went. When these things go up, and the last one I think I saw was I think SpaceX lost a Falcon 9 on launch pad, and that seemed to kind of rumble and it exploded. Whereas this, it was like it detonated. It was a really sudden explosion and, I mean, obviously that's - I want to make clear here, nobody was injured, all persons are accounted for. And that's great. I mean, I don't know if we'll find out in the coming weeks if that's everyone everywhere, because it was such a big explosion. Brandon (17:23) Heard from miles around. Dan you were were saying earlier, 40-mile radius, I think, was what people were reporting. That's insane. Dan Robinson (17:28) Yeah. Richard Speed (17:27) Yeah, 40, 50 miles around, yeah. And the sky was turned orange. If you were in the area, if you were in the state, I think you probably would have been aware of what's happening. Brandon (17:36) And also this isn't too long after, I think it was just last week, that they attempted to launch a satellite using one of their rockets, Blue Origin did, and it failed to reach orbit because something went wrong too. Richard Speed (17:49) Yeah it was a few months back. That was New Glenn 3, or the third New Glenn launch. And what happened there was there was a failure with the second stage and they didn't put the satellite, which was the AST Space Mobile Bluebird 7 satellite, was left in the orbit and it came back to Earth and, you know, whatever else. In the last week, the US Federal Aviation Administration, they cleared New Glenn, or Blue Origin, to resume launching the New Glenn rocket because there had been an explanation. Blue Origin had implemented changes and they were good to go. So that's why the rocket was being rolled with the pad because it was due to launch. I think it was another batch of Amazon Leo satellites, but they weren't on the rocket at the time, they're in the facility somewhere in storage. So that's what they were trying to do. They've basically taken out, I mean, it looks to me as though they've taken out the launch pad. There's not a lot of it left. Brandon (18:49) I think in your story you mentioned that when Starship exploded... like nearby, right? It took months to bring it back into service, and by all accounts this appears to have been a far worse explosion. Richard Speed (18:59) You almost feel like there's these billionaires having some kind of game of one-upmanship here where Elon Musk managed to crash the Super Heavy booster into the Gulf of Mexico. Brandon (19:10) Which grounded Starship again, according to the FAA. Richard Speed (19:26) Starship is now being grounded ... although apart from that, the flight was relatively successful... One of the Raptor vacuum engines failed on that during while it was on its suborbital trajectory, which when they couldn't do the relight of the engine and that means it can't be trusted to go into orbit yet, which is a different issue. And then it's almost like Blue Origin said, right, hold my beer, watch this. Brandon (19:46) I think it was the biggest space-related explosion since what was it called? The Soviet rocket that blew up years ago? Richard Speed (19:54) I think maybe the one that's comparable is perhaps the Soviet Union's N1 rocket from the late 60s, early 70s, that went up. And I think the only way that - it was kept quiet for many, many, many, many years, and think the only reason the Americans were aware of it was they had a spy satellite going overhead. And one day the rocket was there. The next day there's a big crater, ah, something's happened there. Brandon (20:19) I'm interested to see in the coming days what this launch pad looks like once the damage has been done. Blue Origin also just got a contract from NASA, right, to help build this Moon Base. I mean, this is gonna put Artemis in danger again, I imagine. Richard Speed (20:26) I think there's surely only a matter of time now before before NASA admits, yeah, the 2027-2028 thing is just not going to happen now because they're depending on these two commercial providers, Blue Origin and SpaceX, to effectively provide a landing. Brandon (20:48) And neither one seems to have its act together. Richard Speed (20:51) Exactly and the problem is last week you had SpaceX and that didn't go well, but at least it made into a suborbital trajectory and deployed some Starlink mockups. But you thought that's still quite a long way from going to the Moon. But it's okay, but there's a backup, there's Blue Origin. Oh no, there's not now because that's also blown up...I mean they've yet to send their lunar lander to the moon. That's the Blue Moon Mark 1, it was supposed to go this year, and then next year they were going to do the Mark 1 [again, it] was going to take NASA's Viper Rover to the moon. The Blue Moon Mark 2, that's effectively the crewed, the human lander so that was going to go up. That was going to go up in 2027. Again, this is all relying on the New Glenn. This is a problem. It's all reliant on the New Glenn. Then that, and hopefully whatever SpaceX can get ready for the human landing system for Starship was going to go up as well. And then for Artemis III, NASA was going to practice rendezvousing and other bits and pieces, maybe even get astronauts on board these spacecraft in low Earth orbit. That was the plan. This means that plan I just think is probably in as a big a crater as the bits that are left of the New Glenn rocket, because I can't imagine how you'd recover from this in a period of time to actually make what was planned for Artemis III possible. It's just not possible now. But heck, I would love to be proved wrong. Brandon (22:10) Me too, right? Like every time this happens, I'm kinda like, hey, look, the billionaires failed to get a rocket into space again. There's an element of schadenfreude there, but also an element of, come on, guys, let's just get this working. Right? I want I want it to succeed too without continuously polluting the atmosphere with bits of God-knows-what as they explode in various levels of orbit. It'd be great if this worked. Richard Speed (22:31) And of course, you the point you made about the time it's going to take to get back, mean, you know, with the SpaceX, it was the Amos 6 mission in 2016 that exploded at the launch pad. It took about a year before they were launching Falcon 9 from that launch pad...So I think we're looking at at least that period of time for this, probably longer. I can remember talking to another boss of a rocket company, think it was Peter Beck, at Rocket Lab, and he said one of the problems you've got is building the launch pad is the single most expensive time-consuming thing you can do. So in this instance, it would not have been good if New Glenn were not good, but it would have been less bad if it had launched a little bit off the pad and then blown up, rather than blown up while on the pad, taking out all the infrastructure with it. Dan Robinson (23:36) These things are just massive bombs though, really, aren't they? It's just they release their energy slowly normally when they launch. Brandon (23:44) Clearly, right? You saw the mushroom cloud coming off that thing. It was insane. It it looked like a nuclear explosion practically. It was it was nuts. Richard Speed (23:51) I mean they are horrendous things...Astronauts, they have to sit on top of these things, and it is basically a controlled explosion. That's how chemical rockets work. They are exploding all this fuel. It's designed to be highly explosive and very energetic because it's got to lift this rocket off. If you've not seen the video, I'd recommend looking at it because it's just astonishing. Brandon (24:17) Yeah, I'll be sure to include a link to it in the in the in the text copy that I that I add for the recording because yeah, if you haven't seen it, you definitely need to go watch it. So all right, well let's hope that maybe next week we have something a little less explosive to talk about. But no matter what it is, we'll be here to talk about it on The Kettle. Thanks for joining us and we will see you next time. (R)