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Microsoft hikes Xbox console prices $100‑$150 worldwide, discontinues 2TB model and plans layoffs, signaling pressure from a memory‑chip cost crisis.
Microsoft will add $100 to 512 GB Xbox models and $150 to 1 TB versions on Aug. 1, while scrapping the 2 TB Series X, as the company prepares a round of layoffs [2]. The move underscores a component‑cost surge that threatens the console‑subsidy model and could reshape pricing across the gaming hardware market.
| At a glance | |
|---|---|
| Price hike | $100‑$150 per console |
| Effective date | Aug. 1, 2026 |
| Discontinued SKU | Xbox Series X 2 TB |
| Layoffs | Planned for next month |
Microsoft blames a “global components crisis” that has driven storage and memory prices up more than 2.5 times, with a further doubling expected by fall 2027 [2]. The company’s blog post cites these cost pressures as the primary driver, noting that the 512 GB Series S will rise from $400 to $500 and the 1 TB Series X disc edition from $650 to $800 [1]. This is the third increase in 13 months; previous hikes in May 2025 and October 2025 lifted the Series X from $500 to $600 and then to $650 respectively [3].
Sony has already lifted PlayStation 5 prices, with the digital edition now at $600 and the PS5 Pro at $900, making the Xbox Series X the second‑most expensive current‑gen console [1]. Nintendo’s Switch 2 saw a modest $50 rise to $500, highlighting that Microsoft and Sony are bearing the brunt of the memory shortage [1]. The price escalation pushes Xbox consoles into the $800‑$900 range, overlapping with high‑end gaming PCs and eroding the historic $500 price point that defined console affordability for over a decade [3].
The hikes expose a fundamental tension: as AI‑driven demand inflates memory costs, the traditional “sell consoles at a loss” model may become unsustainable, forcing Microsoft and its rivals to rethink pricing, financing, and product roadmaps.
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