Summary
Microsoft will implement global price increases on Xbox consoles beginning August 1, adding $100 to 512 GB models and $150 to 1 TB models, and removing the 2 TB model from its lineup. The company pointed to a severe supply-chain squeeze in storage and memory that has pushed component prices much higher and is expected to continue rising over the next several years.
Key developments
- Effective August 1, Xbox console prices rise by $100 for 512 GB models and $150 for 1 TB models; the 2 TB model will be discontinued.
- Xbox said storage and memory prices have increased by more than 2.5 times and that it expects another doubling by the fall of 2027.
- Industry peers have also adjusted pricing recently: Sony raised PlayStation 5 prices in April after an August increase last year, and Apple raised iPad and MacBook prices citing similar memory and storage cost pressures.
Full report
Microsoft’s Xbox division has announced a global price adjustment for its gaming consoles that takes effect on August 1. The move increases the retail price for 512 GB consoles by $100 and for 1 TB consoles by $150. At the same time, Microsoft will discontinue its 2 TB model.
The company attributed the changes to a deepening global components crisis, particularly in storage and memory markets. In its statement, Xbox said: "Unfortunately, console storage and memory prices have increased by more than 2.5 times and we expect another doubling by the fall of 2027." Xbox added that the hardware supply chain crisis has hit the gaming sector particularly hard.
These changes follow two price increases implemented by Xbox during the previous year, when the business faced tariff-related cost pressures alongside intense competition and uneven consumer spending. Sony has also adjusted pricing for its PlayStation 5 console, with a price increase that took effect in April following another rise in August of last year.
Major device makers beyond the gaming sector have taken similar steps: Apple raised prices for iPad and MacBook models on Thursday, saying it could no longer shield customers from rising memory and storage chip costs driven by the AI industry’s datacenter expansion.
The Xbox business is also planning internal cost reductions alongside the pricing move. Bloomberg News reported earlier this month that Microsoft is planning major layoffs next month and significant cuts to marketing and other budgets within the unit.
Market reactions to these developments were reflected in recent stock moves shown in reporting: MSFT -2.96%, AAPL -4.61%, SONY -3.07%.
Implications for supply chains and markets
The announcement underscores pressure points in the broader consumer electronics supply chain, where surging demand for memory and storage - influenced in part by datacenter and AI investments - is tightening availability and lifting costs. The move by Xbox, alongside price adjustments at other major manufacturers, suggests upward price pressure may be durable for affected product categories unless component cost trends change.