Microsoft has announced that it will increase, starting August 1, the prices of Xbox consoles worldwide. The 512GB models will be $100 more expensive, and the 1TB models will cost $150 more. At the same time, the company will withdraw the 2 TB model from the offer.
It is the third price increase in less than a year. As of October 2025, Microsoft had already raised the prices of Xbox consoles in the United States by between $20 and $70.
Microsoft: Component costs have increased more than 2.5 times
The company says it has tried to avoid another price hike and has been negotiating with suppliers in recent months, but prices of essential components have continued to rise.
“Unfortunately, the cost of memory and storage used in consoles has increased more than 2.5 times and we expect it to double again by the fall of 2027,” Microsoft said.
The company explains that the console industry is affected to a greater extent than other segments of the electronics market, because consoles are usually sold at a price lower than their production cost, the difference to be recovered later through the sale of games and services.
Demand for AI is putting pressure on the memory market
According to Reuters and Forbes, growing demand for memory chips used in artificial intelligence data centers has reduced the availability of components for consumer electronics and driven up prices.
The global market is dominated by three major semiconductor memory manufacturers – Samsung, SK Hynix and Micron Technology – which are trying to cope with the growing demand in the AI sector.
In Micron’s case, high demand led the company to completely stop producing RAM and SSDs for the retail market at the end of last year.
Microsoft also announces programs for buyers
Along with the price hike, Microsoft also introduced several programs to try to make the new consoles more affordable.
The company will expand interest-free installment payment options for eligible purchases, work with partners for zero-interest financing for up to 12 months, and introduce buy-back programs where users can hand in their old consoles in exchange for a voucher or cash.
Microsoft will also continue to sell certified refurbished Xbox consoles available at discounts of up to $100 off the suggested retail price.
The hikes come as other consumer electronics manufacturers have announced price hikes. Sony raised the prices of its PlayStation 5 consoles in April, and Apple on Thursday announced price hikes for some iPad and MacBook models, citing the same pressures from rising component costs.
