The new price adjustments will elevate Xbox console prices by $100 to $150, depending on the model. The entry-level Xbox Series S with 512GB storage will now retail at $500, up from $400, while the 1TB variant will be priced at $600, an increase from $450.
The Xbox Series X Digital Edition will now cost $750, rising from $600, while the disc version will be priced at $800, compared to the previous price of $650.
Additionally, Microsoft has phased out the 2TB Xbox Series X model. Industry experts suggest that the company may have decided against offering a console that could have exceeded the $1,000 mark, given the rising costs of components.
This latest price increase was announced just hours after Apple revealed similar hikes across several hardware products, further illustrating the mounting cost pressures within the tech sector.
According to Microsoft, the driving factor behind this latest price surge is a significant increase in storage and memory costs. The company reported that the prices of these components have surged roughly 2.5 times in recent years and are anticipated to double again by late 2027.
The price hikes highlight a larger issue facing the tech industry: the rapid growth of artificial intelligence infrastructure is amplifying demand for advanced chips, memory, and storage components, thereby inflating prices for a range of products, from smartphones and laptops to gaming consoles.
Microsoft’s gaming division is not the only one grappling with these challenges. Rival Sony has also increased PlayStation prices in recent years, with the digital version of the PlayStation 5 now being significantly pricier than at launch, while the PlayStation 5 Pro has emerged as one of the priciest mainstream gaming consoles currently available.
Nintendo has implemented only minor price hikes for its Switch 2 console so far; however, analysts caution that the company might face similar pressures if component costs keep rising.
For consumers, this trend represents a notable shift from the usual pattern where gaming consoles typically decrease in price over time. Instead, many current-generation consoles are now priced well above their original launch prices, despite being available for over five years.
The persistent increase in hardware costs is also raising concerns regarding the next generation of gaming devices. Industry analysts point out that if current consoles are nearing $800 in some markets, future offerings from Microsoft and Sony could see significantly higher price points compared to previous generations.
Microsoft has indicated that component cost pressures are expected to persist until at least 2027, suggesting that hardware manufacturers might continue to face tough decisions between absorbing losses or passing on increased costs to consumers.
