Microsoft is raising the price of Xbox consoles by $100-$150

Microsoft has announced a price adjustment for its flagship Xbox Series S and X consoles, raising the cost of the 512‑GB variants by $100 and the 1‑TB versions by $150. The company will also phase out the 2‑TB models entirely.

From August 1, 2026, the entry‑level, disc‑free Series X with 1 TB of storage will retail at $749.99, while the traditional disc‑driven edition will be priced at $799.99.

The base 512‑GB Series S will now carry a price tag of $499.99, and its 1‑TB counterpart will be available for $599.99.

This marks the second price hike for Xbox hardware in the past year; the Series X disc‑driven model is now $300 above its launch price in 2020, and the Series S has seen a 50 % increase from its original cost.

Xbox has attributed its recent price hikes to a pervasive shortage of key components that has beleaguered the entire consumer electronics sector, prompting all three major console makers to raise prices. The company said it had hoped to avoid another increase and had spent months negotiating with suppliers for alternatives. Yet storage and memory costs have surged more than 2.5 times, and a further doubling is projected by the fall of 2027. While the broader electronics market is wrestling with the component crunch, consoles are uniquely vulnerable because they are typically sold at a loss rather than at a profit margin, unlike smartphones, PCs, or speakers.

The company announced a partnership with retailers to launch initiatives that make used consoles more affordable. Gamers looking to upgrade or who have outgrown their current system can trade in their units at participating stores for cash or store credit, after which those devices will be resold at reduced prices.

These initiatives follow remarks from Xbox chief executive Asha Sharma, who said the company is exploring “radically different business models” to lower the cost of its forthcoming console. Meanwhile, Valve disclosed that its Steam Machine will launch at a price exceeding $1,000, a figure that analysts have suggested could set the baseline for next‑generation consoles slated for release from 2027 onward.

The worldwide economic climate has intensified pressure on console makers, who have traditionally trimmed prices as models mature. While the PlayStation 4 has seen its price drop to around $200 during its later years, the entry‑level PlayStation 5 now commands a price roughly 50 % higher—about $200 or £200—than it did at its 2020 launch.

Last year, Sony and Microsoft both lifted their console prices. In March, Sony revealed a significant $100 hike for the PlayStation 5, citing the prevailing global economic conditions. Just a month later, Nintendo announced a price bump for the Switch 2 across the United States, Europe, Canada, and Japan.

The home‑console market is facing unprecedented pressure, as prices climb to record highs while households grapple with an overall increase in living costs.

According to Circana’s latest data, U.S. hardware and software sales fell to their lowest point since the series began in 2025, highlighting the fragility of the sector.

The average retail price of new gaming consoles surged from $235 in November 2019 to an eye‑popping $439 in November 2025, more than doubling over a six‑year span.