Another hour, another round of price increases for notable consumer products. Microsoft says it is once again raising prices on Xbox consoles. Starting August 1, the 512GB Xbox Series S will cost $100 more and all 1TB models will cost you $150 more. The company is discontinuing the 2TB version of the Xbox Series X.
These changes will apply globally. Here’s what the updated prices will look like in the United States:
- Xbox Series S (512 GB): $500
- Xbox Series S (1TB): $600
- Xbox Series X Digital (without disc drive): $750
- Xbox Series X: $800
Surprisingly, this is the third increase in console prices in the United States since the start of 2025 for systems launched almost six years ago. Microsoft raised Xbox prices in May last year and then again in October. You already know exactly why.
“We hoped another price increase would not be necessary, and we have spent the last few months working with vendors on options. Unfortunately, console storage and memory prices have increased more than 2.5 times and we expect another doubling by fall 2027,” Xbox said in a blog post. “The entire consumer electronics industry is struggling with the current component crisis, but the effects are particularly harsh on consoles. Unlike phones, computers, speakers, and other consumer devices, consoles are generally not sold at a profit, but rather for less than the cost of manufacturing them.”
The blog post doesn’t go into detail about why storage and memory costs have skyrocketed, but Xbox’s parent company is very complicit. AI companies, including Microsoft, are investing immense capital in building data centers that require tons of memory and storage. The rules of supply and demand dictate rising prices, which, as Xbox notes, affects all kinds of consumer devices. Sony and Nintendo have also recently made their consoles more expensive, while Valve said this week that the component crisis had affected the price and availability of the Steam Machine, which starts at $1,049.
Microsoft says it’s looking to mitigate the impact of Xbox price increases in several ways. These include a buy now, pay later program in Microsoft Stores, zero percent APR financing through Amazon, used console purchases, and certified refurbished systems. As it stands, Microsoft is not relaunching its Xbox All Access program which allowed customers to purchase a console and Game Pass Ultimate via a monthly payment plan.
The company announced console price increases as Xbox executives “reset” the division in an effort to cut costs and increase profitability. Another round of widespread layoffs is expected to hit Xbox after Microsoft’s fiscal year ends on June 30. The head of Xbox Game Studios has just resigned, while several studios are said to be on the chopping block, including Ninja Theory, Double Fine and Compulsion Games. It has been reported that studio executives are negotiating with Xbox in hopes of splitting up their teams or finding a new owner.
