Microsoft announced its third Xbox Series S/X price hike since May 2025, with new prices taking effect on August 1.
This is not a one-off correction. Microsoft first raised Xbox prices in May 2025, followed by another increase in the US in October 2025. This third hike is global, and it hits harder than the previous two. The 512GB models of both consoles will cost $100 more than they currently do. The 1TB variants go up by $150. And if you were holding out for the 2TB option, stop waiting — Microsoft has discontinued it entirely. The company says the decision follows deliberations with suppliers over persistently rising costs of memory and storage components, which have already increased 2.5x overall. Microsoft expects those component prices to double again by fall 2027, which means this almost certainly will not be the last hike.
To soften the blow, Microsoft is introducing Buy Now, Pay Later options and interest-free financing for up to 12 months. Certified refurbished and previously owned consoles will also be made available at lower price points.
Microsoft’s own explanation is worth sitting with: unlike phones, computers, and speakers, consoles are not sold at a profit. They are typically sold below cost, with the expectation that game sales make up the difference. A sustained, industry-wide memory shortage breaks that model, and there is no easy fix. Sony has already raised PlayStation 5 prices across multiple markets for the same reason. The smartphone industry is feeling it too, driven in large part by the voracious memory demands of AI development.
This is not a Microsoft problem or even a console problem — it is a component problem that is working its way through every screen and chip in your life. Apple has raised Mac, iPad, and HomePod prices. The floor on consumer electronics is rising, and it is not coming back down any time soon.
The real question is how long console gaming’s value proposition holds when the hardware itself is no longer cheap.
