Microsoft Raises Xbox Prices by Up to $150, Discontinues 2TB Tier
MSFT•Starting August 1, Microsoft will increase prices of Xbox consoles by $100 for 512GB and $150 for 1TB models while discontinuing the 2TB tier. Memory and storage costs have risen 2.5 times and are projected to double again by fall 2027, squeezing hardware margins.
1. Price Increase Details
Starting August 1, Xbox Series X and Series S consoles will see price increases of $100 on 512GB versions and $150 on 1TB models. The current highest storage tier of 2TB will be phased out.
2. Cost Drivers and Outlook
Component shortages have driven memory and storage prices up 2.5 times, with another doubling expected by fall 2027, prompting Microsoft to adjust console pricing to protect margins. Traditionally sold below production cost, consoles face margin compression without price adjustments.
3. Market and Competitive Context
This marks the third price increase in 13 months as Microsoft counters rising production costs. Competitors including Sony and Nintendo have also raised hardware prices, reflecting an industry-wide trend in gaming hardware inflation.
