Microsoft to Increase Xbox Console Prices Due to Rising Component Costs
Quick Look
- Microsoft announced price increases for Xbox Series S and X consoles, effective August 1, citing significantly rising component costs for storage and memory.
- This move follows Apple's recent price hikes for MacBooks and iPads, reflecting broader struggles within the consumer electronics industry due to supply constraints and increased demand for AI infrastructure.
AI-generated summary
Why It Matters
Microsoft announced Xbox console price increases, following Apple's recent price hikes for MacBooks and iPads, both attributing the changes to rising component costs, particularly for storage and memory. The consumer electronics industry is struggling with a components crisis.
Hours after Apple announced price increases for MacBooks and iPads, Microsoft said consumers can also expect to pay more for Xbox game consoles, reflecting rising component costs.
Starting Aug. 1, Xbox Series S consoles containing 512GB of storage will go up by $100 to about $500, Microsoft said Thursday, while models with 1TB will increase by $150 more. The entry-level Xbox Series X will now start at about $750.
"Last October, we increased XBOX console price by $20-$70 in the U.S.," the company said in a blog post. "We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options."
Microsoft said "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 a limited capacity, and they 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.
That puts a strain on consumers looking to buy devices such as smartphones, tablets and computers. Apple's announcement on Thursday came after CEO Tim Cook told The Wall Street Journal that price increases had become inevitable.
"The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles," the Xbox unit said in the post. "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."
Microsoft said the 2TB Xbox Series X, introduced in 2024, will no longer be available.
Microsoft shares fell 3.5% on Thursday. Apple's stock dropped 6.1%.
What to Watch
AI outlook — possibilities, not facts
Console storage and memory prices will double again by Fall 2027.
Very likely · Within years
Open Questions
- How will these price increases affect Xbox sales?
- Will other console manufacturers follow suit?
- What specific actions are suppliers taking to address costs?
