Microsoft has announced a forthcoming rise in prices for its Xbox Series X/S consoles, with increases reaching $100 USD and beyond, citing heightened expenses for memory and storage components.
“In October of last year, we raised the prices of Xbox consoles by $20-$70 in the United States,” the company specified in a statement on Xbox Wire. “We had hoped another price hike wouldn’t be needed, and we have been collaborating with suppliers for alternatives over the past several months. Unfortunately, the prices for console storage and memory have surged over 2.5 times, and we anticipate another doubling by fall 2027.”
The upcoming price changes indicate that beginning on 1st August this year, the price for the 512GB Xbox variants will increase by $100 USD, while the 1TB versions will experience a $150 rise. Microsoft did not disclose details on regional price increases but confirmed the discontinuation of its 2 TB model.
“The whole consumer electronics sector is grappling with the ongoing components crisis, yet the impact is especially severe for consoles,” the post stated. “Unlike phones, computers, speakers, and other consumer gadgets, consoles are generally not sold at a profit, but rather at a loss.”
In response to these changes, Microsoft is rolling out several initiatives to mitigate the effects of the price increases. Key measures include a Buy Now, Pay Later option on its store platform and interest-free financing for 12 months via Amazon. Furthermore, Microsoft is perpetuating its certified refurbished console program and collaborating with retail partners to provide previously played consoles at lower prices.
This announcement comes after similar actions by industry rivals, with Nintendo recently declaring a price increase for its Switch 2 from €470 to €500 in Europe, effective 1st September, and Sony revealing considerable price hikes for the PlayStation in March.
The skyrocketing hardware expenses can largely be traced to the ongoing AI arms race, with major tech firms, including Microsoft, purchasing substantial quantities of RAM for data center expansions. This trend, examined by Eurogamer’s Robert Purchese, is anticipated to place more strain on the consumer electronics market.
The report of price increases arrives as Microsoft faces additional hurdles, including controversy surrounding reports of impending large-scale layoffs across its studios.