Microsoft has confirmed that Xbox Series X and Series S prices will rise by $100 to $150 in the US from August 1, 2026, citing a more than 2.5x increase in console storage and memory costs. The company also announced it is discontinuing the 2TB model, widely considered the best option.
Price Increases by Model
According to Microsoft, consoles with 512GB of storage will see a $100 price hike, while 1TB models will increase by $150. UK price rises are expected to be around £80 for the 512GB model and £130 for the 1TB model, though official figures have not been confirmed.
In a blog post, Microsoft explained: “Last October, we increased Xbox console price by $20-$70 in the U.S. We hoped another price increase would not be necessary, 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 and we expect another doubling by the fall of 2027.”
Industry Context and Impact
The company noted that the entire consumer electronics industry is struggling with a components crisis, but consoles are hit particularly hard because they are typically sold at a loss. “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,” Microsoft added.
The price increases come amid a difficult period for the Xbox brand, which has faced studio closures, game cancellations, mass layoffs, and policy shifts in 2026. The timing is notable as many gamers are looking to purchase consoles ahead of the highly anticipated release of GTA 6.
New Financing Options
To soften the blow, Microsoft has announced plans to introduce various payment schemes, including buy-now-pay-later options. The company is also working with partners to offer interest-free financing, as well as refurbished and second-hand consoles at reduced prices.
The discontinuation of the 2TB model has disappointed many fans, as it offered the most storage for digital game libraries. Microsoft has not indicated whether a replacement model will be introduced.
