Microsoft has announced a significant increase in Xbox console prices globally, just hours after Apple raised prices across its Mac, iPad, and other hardware products.
The company confirmed that the new Xbox prices will take effect on August 1, citing soaring costs of memory and storage components driven by the rapid expansion of artificial intelligence infrastructure.
As part of the changes, Microsoft also announced that it is discontinuing the 2TB Xbox model, simplifying its hardware lineup.
Xbox prices increase by up to $151
Under the new pricing structure, Xbox consoles will see substantial price hikes across all major models:
- Xbox Series S 512GB: $499 (up from $399)
- Xbox Series S 1TB: $599 (up from $449)
- Xbox Series X 1TB Digital: $750 (up from $599)
- Xbox Series X 1TB Disc: $800 (up from $649)
The increases come less than a year after Microsoft previously adjusted Xbox prices in the United States.
AI boom blamed for rising costs
According to Microsoft, the decision was driven by unprecedented increases in the cost of memory and storage components used in modern gaming consoles.
The company said memory prices have risen to more than 2.5 times previous levels and warned that costs could potentially double again by late 2027 if current market conditions continue.
The announcement closely follows Apple’s recent price increases across several product categories, including MacBooks, iPads, HomePods, and Vision Pro.
Apple similarly blamed the AI industry, saying the explosive demand for memory chips and storage from AI data centres has placed enormous pressure on global semiconductor supply chains.
The back-to-back announcements from two of the world’s largest technology companies highlight how the global AI boom is beginning to affect everyday consumer electronics.
As companies invest billions of dollars in building increasingly powerful AI systems, demand for advanced memory and storage chips has surged, making key components more expensive across the technology industry.
Microsoft offers financing options
To help reduce the impact on consumers, Microsoft said it plans to expand access to more affordable purchasing options.
The company revealed it is developing new programs that will allow customers to purchase previously owned Xbox consoles at lower prices.
Microsoft Stores will also offer expanded Buy Now, Pay Later financing options for eligible Xbox purchases.
In addition, customers buying Xbox hardware through Amazon will be able to access financing plans offering up to 12 months of 0% APR on qualifying purchases.
The gaming industry is facing broader price increases
Microsoft now joins Sony in increasing console prices. The PlayStation 5 Digital Edition, which originally launched at $499, now retails for $599 in several markets following Sony’s adjustments.
Meanwhile, Nintendo has implemented only modest price increases for its Switch 2 so far, although analysts believe continued pressure on semiconductor costs could eventually force additional price adjustments.
With artificial intelligence driving record demand for advanced computer chips, consumers may continue to see higher prices across smartphones, laptops, gaming consoles, and other electronic devices as manufacturers pass rising production costs on to buyers.
