Xbox confirms massive console price hike as hardware costs spiral out of control
Xbox gamers are having to deal with significant price hikes after AI demand causes the cost of hardware to skyrocket, and many fans are understandably enraged by the announcement.
It isn't the first time that gaming has experienced price hikes in recent years and it probably won't be the last, yet the latest Xbox announcement has stung especially as we're just months away from GTA 6.
It's not out of the question that many people were planning on upgrading their console or finally moving from the previous generation to the current one for Rockstar's hotly anticipated follow-up, yet that won't just be extra expensive after GTA's price tag was revealed, as the cost of all Xbox consoles has also gone up.
Apple coincidentally announced price hikes of its own at roughly the same time, making yesterday one of the more cost-unfriendly moments in recent tech history.
How much have Xbox consoles increased in price?
Microsoft has increased the price of all 512GB Xbox consoles by $100, with 1TB models also jumping up by $150 in a move that hasn't been well received.
- Xbox Series S 512GB — now $499 (was $399)
- Xbox Series S 1TB — now $599 (was $449)
- Xbox Series X 1TB — now $800 (was $649)
- Xbox Series X 1TB Digital — now $750 (was $599)
As you can see this makes even the base Series S console far more expensive than most gamers would be willing to pay, matching the price of the Series X when it was first launched back in November 2020.
Games consoles have historically dropped significantly in price over their lifespan, but as a result of both tariffs and AI demand, prices have nearly doubled in some extreme cases.
The Series S, for example, has increased in price by 67% since launch, whereas the Series X has been bumped up by $800 to become the most expensive 'base' console ever released.
It's certainly a worrying sign for the prospective price of the next Xbox console, currently codenamed Project Helix, as that not only will be more expensive by default but also includes far more powerful hardware that's akin to a PC rather than a console.
Why have prices increased so much?
The elephant in the room when it comes to these price hikes is obviously artificial intelligence, and Xbox makes that clear enough when outlining the motivation behind the decision they were likely reluctant to make — especially after new CEO Asha Sharma previously noted that gaming is 'too expensive'.
"We hoped another price increase would not be necessary," the blog post regarding the cost increases reveals, "and we have spent the last several months working with suppliers on options.
"Unfortunately, console storage and memory prices have increased by more than 2.5x," Xbox indicates, "and we expect another doubling by the fall of 2027."
Stating this fact so clearly might suggest that they've priced the projected further increases into the cost already, but it also wouldn't be surprising to see another similar announcement in a year's time.
"The entire consumer electronics industry is struggling with the current components crisis, but the effects are particular hard on consoles," Xbox argues.
"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."
What people are also unhappy about is the suggestion from Xbox that gamers can take advantage of Buy Now, Pay Later plans to afford the new price points with some calling it a 'trap' — although Microsoft does make it clear that these are 'predictable', short-term, and interest-free options.