In a move that follows Apple’s recent price hikes, Microsoft has announced that prices for Xbox game consoles will increase starting August 1. The company also disclosed the discontinuation of its 2TB model.
The adjustments will see a worldwide increase of $100 for the 512GB models and $150 for the 1TB versions.
The new pricing structure is as follows:
- Xbox Series S 512GB will rise from $399 to $499.
- Xbox Series S 1TB will increase from $449 to $599.
- Xbox Series X 1TB Digital will go up from $599 to $750.
- Xbox Series X 1TB Disc will see a jump from $649 to $800.
Microsoft attributes these price increases to rising costs of memory and console storage, which have soared to more than 2.5 times previous levels. The company has warned that these prices could potentially double by fall 2027. This announcement comes less than a year after the last price increase for Xbox consoles in the U.S. in October.
The timing of Microsoft’s announcement closely follows Apple’s own price increases affecting products like Macs and iPads, which were also attributed to the same industry-wide pressures, particularly escalating memory and storage costs driven by the growing demand for AI infrastructure and data centers.
Together, these announcements highlight the significant impact of the AI boom on the prices of consumer electronics. As tech companies invest heavily in more substantial AI systems, the demand for high-quality memory and storage chips has surged, leading to tighter supply chains and increased costs across the sector.
To mitigate the impact of these price hikes, Microsoft is emphasizing financing options and plans to broaden access to more affordable hardware. The company announced efforts to create new programs that will allow customers to purchase previously used consoles at lower prices.
Customers buying eligible Xbox hardware through Microsoft Stores will have enhanced access to buy now, pay later options, while Amazon customers may qualify for up to 12 months of 0% APR financing on eligible purchases.
With these changes, Microsoft joins Sony in raising prices for gamers, as the PS5 digital edition has also seen a price jump from $499 to $599 since its launch. Meanwhile, Nintendo’s price increase for the Switch 2 has been relatively modest, although the company may face future pressure to raise prices further.
