Microsoft has announced price increases across its Xbox console lineup, just hours after Apple raised prices on Macs and iPads, both driven by the same root cause: surging memory chip costs from the AI data centre boom.
The new prices take effect worldwide on August 1. The Xbox Series S 512 GB rises from US$399 to $499 (from £322 to £403), an increase of $100. The Series S 1 TB jumps from $449 to $599 (£363 to £484), a $150 increase. The largest hikes hit the Series X: the 1 TB Digital edition climbs from $599 to $750 (£484 to £606), while the 1 TB Disc version goes from $649 to $800 (£524 to £646), increases of $151 each. Microsoft is also discontinuing the 2 TB model.
“The increases are being driven by memory and console storage prices rising, with costs more than 2.5 times higher than previous levels,” the company said in a statement. Microsoft warned these costs could double by autumn 2027.
This is the second Xbox price hike in less than a year, following a US increase in October 2025. Sony’s PlayStation 5 currently costs US$599 (£484), already up from its US$499 (£403) launch price, and Nintendo’s Switch 2 faces similar pressure.
The memory crisis that won’t quit
The same forces hitting Apple are squeezing Microsoft. AI data centre construction has consumed an unprecedented share of global memory production capacity. Manufacturers including Micron, SK Hynix, and Samsung have prioritised high-bandwidth memory for AI accelerators, leaving less supply for consumer electronics and gaming consoles.
Apple described the situation as “unsustainable” and said it had “never seen a component price increase this much, this quickly.” DRAM prices surged as much as 98 percent in a single quarter, according to TrendForce. Intel CEO Lip-Bu Tan has said there will be no meaningful relief until 2028.
Microsoft’s mitigation measures
To soften the blow for consumers, Microsoft is expanding financing options. Customers purchasing eligible hardware through Microsoft Stores will get greater access to buy-now-pay-later programs, and Amazon shoppers can qualify for up to 12 months of zero-percent APR financing on eligible purchases. The company also said it is “working on new programs to provide previously played consoles at lower prices.”
Sources: Xbox follows Apple with price increases (TechCrunch, June 25, 2026)