Microsoft announced Thursday that Xbox console prices will increase starting Aug. 1, with the Xbox Series S (512GB) rising $100 to approximately $500 and the entry-level Xbox Series X starting at about $750. The company cited rising component costs, stating that console storage and memory prices have increased by more than 2.5x. The announcement came hours after Apple revealed price increases for MacBooks and iPads, reflecting widespread supply constraints in the consumer electronics industry.
Microsoft Announces New Xbox Pricing Structure
Starting Aug. 1, Xbox Series S consoles containing 512 GB of storage will increase by $100 to approximately $500, while models with 1 TB will increase by $150 more. The entry-level Xbox Series X will now start at approximately $750. Microsoft stated in a blog post that the 2 TB Xbox Series X, introduced in 2024, will no longer be available.
"Last October, we increased XBOX console price by $20-$70 in the U.S.," the company said in the blog post. "We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options."
Component Cost Drivers Behind Price Increase
Microsoft stated that "console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027." Memory manufacturers such as Micron and SK Hynix have limited capacity and are prioritizing high-bandwidth memory for artificial intelligence infrastructure, such as Nvidia's graphics processing units. Manufacturers are raising prices to reflect higher demand, resulting in wider profit margins.
"Unlike phones, computers, speakers, and other consumer devices, consoles are typically not sold at a profit, but instead for less than they cost to make," Xbox said in the post. "The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles."
Industry-Wide Impact on Consumer Electronics
Apple announced price increases for MacBooks and iPads on Thursday, with CEO Tim Cook telling the Wall Street Journal that price increases had become inevitable. The component shortage puts strain on consumers looking to buy devices such as smartphones, tablets, and computers.
Stock Market Response to Pricing Announcements
Microsoft shares sank almost 4% on Thursday following the announcement. Apple's stock dropped 5% on the same day.
FAQ
What are the new Xbox console prices starting Aug. 1?
The Xbox Series S (512GB) will cost approximately $500, an increase of $100. Models with 1 TB will increase by $150 more. The entry-level Xbox Series X will start at approximately $750.
Why is Microsoft raising Xbox console prices?
Microsoft stated that console storage and memory prices have increased by more than 2.5x. Memory manufacturers are prioritizing high-bandwidth memory for artificial intelligence infrastructure, creating supply constraints for consumer electronics.
How much did Microsoft increase Xbox prices last October?
Microsoft increased Xbox console prices by $20-$70 in the U.S. last October.
