Microsoft $MSFT announced price increases for Xbox consoles effective Aug. 1, with 512 GB models rising $100 and 1 TB models rising $150. The entry-level Xbox Series X $TWTR will now start at about $750, according to CNBC.
Microsoft cited a more than 2.5x rise in storage and memory prices, with another doubling expected by fall 2027
Ina Fassbender / Getty Images
Microsoft $MSFT announced price increases for Xbox consoles effective Aug. 1, with 512 GB models rising $100 and 1 TB models rising $150. The entry-level Xbox Series X $TWTR will now start at about $750, according to CNBC.
According to Microsoft, the cost of storage and memory components has climbed to more than 2.5 times their previous levels, with a further doubling anticipated before fall 2027 arrives. The 2 TB Xbox Series X, which launched in 2024, is being pulled from sale entirely. The price increases follow a previous round of Xbox price hikes last October of $20 to $70 in the U.S., the company said.
In its announcement, Xbox drew a distinction between consoles and other gadgets, noting that the industry-wide component squeeze hits console platforms with particular severity. The company explained that while devices like phones and computers are generally priced to generate a margin, consoles are routinely sold below their manufacturing cost.
To offset the higher prices, Microsoft announced several options for buyers. These include buy now, pay later plans through Microsoft Stores, interest-free financing for up to 12 months on eligible hardware purchased through Amazon $AMZN, a trade-in program through retail partners that will make previously played consoles available at lower prices, and certified refurbished consoles at Microsoft Stores for up to $100 off the suggested retail price.
Shares of Microsoft closed down roughly 4% on Thursday.
The Xbox price increases arrived hours after Apple $AAPL raised prices on five MacBook and iPad models, marking the first time the company passed rising memory and storage costs to consumers. Apple cited the buildout of AI infrastructure as a key driver, noting that chip suppliers have redirected production toward high-bandwidth memory for AI servers. Apple stock fell about 5% on Thursday.
Producers of memory chips, including Micron $MU and SK Hynix, have funneled their limited output toward high-bandwidth memory destined for AI hardware such as Nvidia $NVDA GPUs, leaving consumer electronics makers to compete for a shrinking pool of supply. That dynamic has driven up costs across the industry, including for console makers.
Xbox is not the first console platform to raise prices in response. Sony $SONY raised prices across its PS5 lineup earlier this year, with the PS5 Pro seeing the steepest U.S. increase of $150, pushing it to $899.99. Sony cited continued pressures in the global economic landscape and rising memory costs as the basis for that move.
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