Xbox Series X and Series S consoles are getting their third price increase since 2025, with a $100 jump on 512GB models and $150 on 1TB models taking effect August 1. The 2TB model is being discontinued entirely. The price of memory and storage has surged 2.5 times since Xbox's last increase in October, the company said in an Xbox Wire post.
Microsoft expects those costs to double again by fall 2027. The culprit: AI expansion has created insatiable demand for RAM and flash memory, squeezing a console industry that already sells hardware at a loss.
Unlike phones, PCs, or speakers, consoles are typically sold below cost and recouped through game sales and subscriptions. That model breaks when component prices climb this fast.
The new US pricing breaks down as follows: - Xbox Series S 512GB: $500 (up from $400) - Xbox Series S 1TB: $600 (up from $450) - Xbox Series X All-Digital 1TB: $750 (up from $600) - Xbox Series X with disc drive 1TB: $800 (up from $650) - Xbox Series X 2TB: Discontinued (was $800) The 2TB model hit $800 at the last increase, making it the most expensive standard-edition Xbox ever. Microsoft is killing it rather than raising the price further.
Xbox's first price hike came in May 2025, driven by tariffs imposed by then-President Trump. A second followed in September 2025, which Microsoft blamed on "changes in the macroeconomic environment." This third round is purely about components, with AI data center buildouts diverting global memory supply away from consumer electronics.
The increases put Xbox in line with broader industry trends. Sony raised PlayStation 5 prices earlier this year, and Nintendo has announced a Switch 2 price increase.
Apple has also raised prices on MacBooks and iPads. To blunt the impact, Microsoft is rolling out a "Buy Now, Pay Later" option through Microsoft Stores with interest-free installments. Amazon buyers get 0% APR financing for up to 12 months.
The company is also launching trade-in programs with retail partners and offering certified refurbished consoles at Microsoft Stores for up to $100 below MSRP. The price increases arrive as new Xbox leadership takes over. Asha Sharma replaced Phil Spencer as head of Xbox earlier this year, inheriting a console business that has struggled to keep pace with PlayStation and Nintendo in sales.
Hardware getting more expensive, not less, as a generation ages is historically unusual and makes that gap harder to close.
Xbox is already developing its next-generation system, codenamed Project Helix. No release window has been announced, but the trajectory of component costs raises an uncomfortable question about what that console will cost.
