A photo of an Xbox Series X and Xbox Series S.

Image by Mikla via Adobe Stock

Microsoft has announced another round of worldwide price increases for its Xbox console line, the Xbox Series X|S. Starting August 1, 2026, the price of 512GB models of the Xbox Series S will increase by $100, and the price of 1TB models of both models will increase by $150. The 2TB Xbox Series X will be discontinued.

This means the cheapest Xbox (a 512GB Xbox Series S) will cost $499.99, and the Xbox Series X will cost $749.99.

This is the latest wave of console price hikes for Microsoft—though Sony and Nintendo have also increased the price of their flagship consoles. In its previous announcements, Microsoft attributed the increase due to vague "macroeconomic conditions." This time however, it's being direct about the price hike: the global memory hardware shortage driven by generative AI companies' exclusive deals with major manufacturers of DRAM fabricators.

"We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options," the company said in a post explaining the price increase. "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."

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Xbox isn't the only manufacturer to point to memory manufacturers' supply shortage as the cause of its pricing woes. As Valve prepares to launch the Steam Machine, it's been candid about how memory price increases drove them to crank up the price of the Steam OS-based device. In an interview with Gamer's Nexus, it explained that it can't even secure a fixed contract with memory manufacturers, who will apparently alter the price and quantity of memory chips on a monthly basis.

CEO Asha Sharma has already warned Microsoft's investors that the shortage could force the company to rethink its approach to its next generation console, called Project Helix. It's one of many issues that are driving her "reset" of the video game vertical, which will reportedly be accompanied by mass layoffs.

Though it's worth remembering that one of the biggest companies driving the push for widespread adoption of generative AI is, as we've noted before, Microsoft.

About the Author

Bryant Francis

Senior Editor, GameDeveloper.com

Bryant Francis is a writer, journalist, and narrative designer based in Boston, MA. He currently writes for Game Developer, a leading B2B publication for the video game industry. His credits include Proxy Studios' 4X strategy game Zephon, Iron Anchor Studios' Down With The Ship, and Amplitude Studio's 2017 game Endless Space 2.