Microsoft has announced significant price increases of $100 USD and beyond for its Xbox Series X/S consoles, blaming the rising costs of memory and storage for the move.
“Last October, we increased Xbox console price by $20-$70 in the US,” it wrote in a post on Xbox Wire. “We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options. Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027.”
As a result, Microsoft has announced its 512 GB Xbox models will see their price increase by $100 USD starting 1st August this year, while its 1 TB models will rise by $150. It did not share regional price increase details, but confirmed it’s also “sunsetting” its 2 TB Xbox model.
“The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles,” its post continued. “Unlike phones, computers, speakers, and other consumer devices, consoles are typically not sold at a profit, but instead for less than they cost to make.”
Microsoft also highlighted several initiatives it says will make its console more “accessible” following the price increase. These include a Buy Now, Pay Later option on its own store and interest free financing for up to 12 months through Amazon. It also pointed to its certified refurbished console scheme and the work it’s undertaking with retail partners to “provide previously played consoles at lower prices.”
Microsoft’s Xbox price increases follow similar moves by Nintendo – which recently announced it would be raising the price of Nintendo Switch 2 from €470 to €500 in Europe ($450 to $500 in the US) effective 1st September – and Sony, which announced significant increases for PlayStation in March. As to why we’re seeing such a dramatic increase in the cost of hardware, much of it’s down to the current AI arms race, as tech giants – notably including Microsoft itself – continue to hoover up RAM to expand their datacetnres. Its a phenomena Eurogamer’s Robert Purchese explored last year, and one that’s likely to cause increasing strife for the consumer electronics industry at large.
Today’s news comes at a poor time for Microsoft, which is already facing controversy amid reports it’s poised to begin major layoffs across its studios.
