The dust on the outside doesn’t do too much. But if it accumulates, chances are that it’s also getting inside of the device. Consoles rely on fans to move air through the device to cool it. Inside the device it can impede airflow and prevent internal components from cooling off by covering passively cooled components (like the RAM) or clogging heatsinks and fans for the actively cooled components.
If the device detects that its components are getting too hot, it will slow them down to prevent them from overheating and causing permanent damage.
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