Microsoft hikes Xbox prices, joining Apple and Sony in rising hardware costs
If you've had your eyes on a new Xbox, you might want to act quickly. Microsoft is increasing the prices of its gaming consoles starting August 1 — making it the second global hike in just a little over a year.
Microsoft said in a statement: "We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options."
If you're eyeing a 512GB model, expect to pay an extra $100. If you're looking at the 1TB model, it'll cost you an additional $150. New UK prices haven't been confirmed yet, but these increases could roughly convert between £80 and £130.
The reason? It all comes down to a global shortage of RAM – the memory chips that power pretty much every modern tech gadget.
The culprit is the massive boom in Artificial Intelligence (AI), with data centres gobbling up memory supplies faster than manufacturers can make them. Apple recently increased its prices across several of its iPads and MacBooks. Sony also raised the costs of its PlayStation 5 consoles.
Microsoft continued in its statement: "Unfortunately, console storage and memory prices have increased by more than 2.5x, and we expect another doubling by the fall of 2027. The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles.
"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."
While this is the second global increase in a year, this marks the third time in the US. This means some Xbox consoles now cost around 40% more than they did just twelve months ago.
Microsoft is also planning to sunset the 2TB model. This console features double the internal storage — allowing you to hold roughly 25 to 30 major titles simultaneously.
The announcement of the new prices arrives just after Microsoft u-turned on its Xbox Game Pass price increases in April.
Microsoft slashed the price of Game Pass Ultimate from £22.99 to £16.99 per month, saving you £6 every month going forward. PC Game Pass has also dropped to £10.99 monthly.
The shift marked the first big move from Asha Sharma, who took over as Xbox's Chief Executive in February.
It comes after an internal note regarding Game Pass's prices from Ms Sharma was leaked to The Verge. In the memo, she writes: "Game Pass is central to gaming value on Xbox. It’s also clear that the current model isn’t the final one.
"Short term, Game Pass has become too expensive for players, so we need a better value equation. Long term, we will evolve Game Pass into a more flexible system, which will take time to test and learn around."
Players should have seen an immediate difference on their next bill.