Microsoft Raises Xbox Prices Following Apple's Hardware Hike

Beginning August 1, Microsoft will raise prices for Xbox consoles worldwide, with the 512GB models increasing by $100 and the 1TB versions by $150. The company also revealed it will discontinue its 2TB Xbox model.

The updated pricing details include the Xbox Series S 512GB rising from $399 to $499, the Xbox Series S 1TB moving from $449 to $599, the Xbox Series X 1TB Digital increasing from $599 to $750, and the Xbox Series X 1TB Disc climbing from $649 to $800.

Microsoft attributed these price hikes to escalating costs of memory and console storage, which have surged to more than 2.5 times previous levels. The company further cautioned that prices might double by the fall of 2027. This adjustment follows a prior Xbox price increase in the U.S. last October.

This announcement comes shortly after Apple disclosed price rises for its hardware products including Macs and iPads, citing similar industry-wide pressures. Apple pointed to soaring memory and storage expenses driven by unprecedented demand for AI infrastructure and data centers.

These consecutive price increases highlight the impact of the AI boom on consumer electronics pricing. As major technology firms invest heavily in expanding AI systems, demand for advanced memory and storage chips has surged, tightening supply chains and pushing prices upward across the sector.

To mitigate the effect on consumers, Microsoft emphasized financing options and plans to broaden access to more affordable hardware. The company stated it is “working on new programs to provide previously played consoles at lower prices.”

Customers buying eligible Xbox hardware from Microsoft Stores will have enhanced access to Buy Now, Pay Later programs. Additionally, Amazon shoppers can qualify for up to 12 months of 0% APR financing on qualifying purchases.

Microsoft’s price increase places it alongside Sony, whose PS5 digital edition now costs significantly more than at launch, rising from $499 to $599. Meanwhile, Nintendo’s price increase for the Switch 2 has been relatively modest, though the company may face future pressure to raise prices further.