Microsoft axes another Xbox console before sweeping price increases

Gaming continues to get more expensive, and Microsoft is the latest company to announce a major hardware price increase. Following Sony's PlayStation 5 price hikes earlier this year, Xbox consoles are now becoming significantly more expensive worldwide, with increases of up to $250 depending on the model.

Microsoft confirmed that the new pricing will take effect on August 1, 2026, while also announcing that the 2TB Xbox Series X Galaxy Black Edition is being discontinued. The updated US pricing is as follows:

512GB Xbox Series S: $399.99 → $499.99
1TB Xbox Series S: $449.99 → $599.99
1TB Xbox Series X All-Digital: $599.99 → $749.99
1TB Xbox Series X (Disc Drive): $649.99 → $899.99

Although the XBOX Wire blog post announcing the decision only listed US Dollar amounts, it did confirm that the pricing changes will impact purchases globally. This marks the third Xbox price increase during the current console generation, following previous hikes in May 2025 and October 2025.

According to Microsoft, the main driver behind the increases is the continued surge in memory and storage costs. The company says demand from the AI industry has placed enormous pressure on the semiconductor supply chain, making DRAM and NAND flash significantly more expensive than they were just a few years ago.

The higher manufacturing costs have also renewed questions about Microsoft's long-term hardware strategy. Xbox consoles have traditionally been sold at a loss, with Microsoft relying on software and services to generate profit. With these latest price increases, the company may finally be moving toward making at least some profit on console hardware itself.

The announcement comes as gaming hardware across the industry continues to climb in price. Nintendo recently increased the price of the Switch 2, Valve's upcoming Steam Machine starts at $1,049, and premium editions of major games such as Grand Theft Auto VI are becoming increasingly popular despite their higher price tags. If component costs continue rising as expected, gamers may have to prepare for even more expensive hardware over the next few years.

As always, for the latest news on hardware launches, industry trends, and developments across the gaming world, be sure to follow our dedicated gaming and hardware coverage.