Microsoft raises Xbox console prices on rising component costs
▼ Summary
– Microsoft announced price increases for Xbox Series S and Series X consoles, citing rising component costs, with the 512GB Series S rising $100 to about $500 and the entry-level Series X starting at about $750.
– The company stated that console storage and memory prices have more than doubled and are expected to double again by fall 2027.
– Memory manufacturers are prioritizing high-bandwidth memory for AI infrastructure, limiting capacity and raising prices for components used in consumer electronics.
– Microsoft noted that consoles are typically sold at a loss, making them more vulnerable to component price hikes compared to other devices like phones and computers.
– Apple also announced price increases for MacBooks and iPads on the same day, reflecting broader industry-wide component cost pressures.
Starting Aug. 1, gamers will face significantly higher costs for Microsoft’s Xbox lineup. The Xbox Series S with 512GB of storage will jump by $100 to approximately $500, while the 1TB model will rise by $150. The base Xbox Series X will now start at roughly $750. This announcement came just hours after Apple revealed price hikes for its MacBooks and iPads, underscoring a broader trend of rising costs across consumer electronics.
Microsoft attributed the increases to surging component costs, particularly for memory and storage. In a blog post, the company explained, “Last October, we increased Xbox console prices by $20 to $70 in the U. S. We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options.” The company noted that console storage and memory prices have more than doubled, and they expect another doubling by fall 2027.
The root cause lies in supply constraints. Memory manufacturers like Micron and SK Hynix have limited capacity and are prioritizing high-bandwidth memory for AI infrastructure, including Nvidia’s graphics processing units. This shift has driven up prices and widened profit margins for chipmakers, but it strains consumers eyeing smartphones, tablets, or gaming consoles.
Apple’s CEO Tim Cook recently told The Wall Street Journal that price increases had become unavoidable. Microsoft’s Xbox unit echoed that sentiment, stating, “The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles. 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.”
Additionally, Microsoft confirmed that the 2TB Xbox Series X, introduced in 2024, will be discontinued. The news weighed on the company’s stock, which fell 3.5% on Thursday, while Apple shares dropped 6.1%.
(Source: CNBC)
